Hyderabad: The state government has requested the Centre to collect VAT for the gas explored off shore by companies. If the Centre accepts the state’s request it will get huge revenue every year. ONGC, Reliance and Gujarat Gas Company are exploring gas in Krishna Godavari basin off shore.
According to Central government rules if gas is explored beyond 12 nautical miles in the sea it will be called off shore and it is “no states land”. The companies can sell the gas explored off shore to any state and state government has no right to collect VAT. But for the purpose of collecting Income tax from these firms, centre is treating this off shore as Indian land.
The AP government wants to treat the off shore land as belonging to it even as the Centre is treating it as Indian land to collect income tax. If the Centre accepts the state governments request it will get more than Rs 2,000 crore per year. On the request of several states, the Centre had agreed to supply 30 per cent gas to the power projects for two years if the state governments waive VAT.
Gujarat and Maharashtra accepted the Centre’s proposal and recently AP government also accepted it. Due to this state government will lose around Rs 1,100 crore per year. State government officials said if the Centre agrees to collect the VAT on gas explored off shore, the state can fill the loss of Rs 2,200 crore in two years by accepting to waive VAT on gas to power projects.
Officials said that the AP Chief Minister N. Chandrababu Naidu wrote a letter to the Centre requesting to collect VAT from the companies which are exploring gas off shore in KG basin. In the letter the CM asked the Centre to announce, the name of gas companies which explore gas off shore as that land belongs to that state.
