Excise duty waiver will promote biodiesel, says Murli Deora
CST cut will help in cost-effective petroleum movement Biodiesel manufacture will become lucrative
NEW DELHI: Industry on Wednesday hailed the grant of infrastructure status to gas pipelines and waiver of excise duty on biodiesel by Finance Minister P. Chidambaram. This would be a big boost to achieving energy security and for promotion of eco-friendly fuel, the sector said.
The industrial sector is also happy about the reduction of Central Sales Tax by one per cent as this measure will help in cost-effective inter-State movement of petroleum products.
Gas Authority of India Limited said the tax relief, in the form of infrastructure status, would be directly reflected in lower tariffs in the pipeline system and would make the product more affordable to consumers. The new concession would also make additional funds available as such investments would qualify for tax benefits under the new regime, said a senior official.
Mr. Chidambaram also provided infrastructure status to the cross-country natural gas distribution network, including pipeline and storage facilities integrated with it. The status, which gives a 10-year income-tax holiday, would help bring down gas transportation cost by 12-14 per cent. The tax break would mean a net saving of about Rs. 300 crore to fertilizer companies if they used pipelines.
Integrated Research and Action for Development executive director Jyoti Parikh said the waiver of excise duty on biodiesel would benefit farmers and make its manufacture lucrative.
She stressed the need to provide direct support to farmers by way of incentives including increasing the purchase price of biodiesel from Rs. 25 to 30 in view of the excise cuts.
Petroleum and Natural Gas Minister Murli Deora hailed the budget that, he said, was well balanced with the focus on the common man.
``When we reduced the prices of petrol and diesel on February 15, the Finance Minister committed himself to partly meeting the reduction through changes in duties. I am happy to note that he has fulfilled the assurance and met the long pending demand of the oil industry.''
The elimination of excise duty on biodiesel would give a boost to environment friendly fuels.