India planning windfall tax on oil producers – paper

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India may levy a new windfall tax on firms such as Cairn India and Reliance Industries Ltd that have discovered oil in the country, the Economic Times reported on Monday, citing government sources.

The government has proposed to take away 40% in “windfall gains” from private sector oil producers on prices above $75 a barrel, the newspaper said. For state-run oil firms such as Oil and Natural Gas Corp, the windfall tax would be 100%, the newspaper said.

The government has sought legal opinion to assess if the move is consistent with the production sharing contracts signed by firms under the exploration licensing policy, the newspaper said.

Reliance is about to start oil production from its KG basin off India's east coast, while Cairn India is scheduled to begin oil production in the western state of Rajasthan by 2009, the paper said. (Reuters)

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