The Oil Ministry is in favour of bringing petroleum products under the ambit of the Goods and Services Tax.
Speaking at the contract signing ceremony for the winners of the discovered small fields auction, the Minister of state (Independent Charge) for Petroleum and Natural Gas, Dharmendra Pradhan, said, "GST on petroleum products will be in favour of states. We are confident that petroleum products will be under the GST regime."
He also said that India's energy requirement is growing but there are limitations in production. Suggesting solutions for this, Pradhan said, "The government has signed a production enhancement contract and incentives for enhanced oil recovery are being worked out."
The government has signed the contracts for fields awarded under the Discovered Small Field Bid Round 2016. The government estimates a total revenue of Rs 46,400 crore from these 31 contract areas.
A press statement from the Directorate General of Hydrocarbons noted, "Gross royalty collection and state royalty collection is expected to be around Rs 5,000 crore and Rs 2,100 crore, respectively."
The government expects a revenue share of Rs 9,300 crore.
The government has awarded 31 contract areas to 22 companies of which 15 are new entrants to the exploration and production industry.