[TO BE PUBLISHED IN PART II, SECTION 3, SUB-SECTION (i) OF THE GAZETTE OF INDIA, EXTRAORDINARY]

 

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(Department of Revenue)

 

Notification No.3/2017-Integrated Tax (Rate)

New Delhi, the 28th June, 2017

 

GSR (E).- In exercise of the powers conferred by sub-section (1) of section 6 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), the Central Government, being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby exempts inter-State supplies of goods, the description of which is specified in column (3) of the Table below read with relevant List appended hereto and falling under the tariff item, sub-heading, heading or Chapter, as the case may be, as specified in the corresponding entry in column (2) of the said Table, from so much of the integrated tax leviable thereon under section 5 of the Integrated Good and Services Tax Act, 2017 (13 of 2017) as is in excess of the amount calculated at the rate specified in the corresponding entry in column (4) of the said Table and subject to the relevant conditions annexed to this notification, as specified in the corresponding entry in column (5) of the Table aforesaid.

 

TABLE

 

S.

No.

Chapter / Heading / Sub- heading / Tariff item

Description of Goods

Rate

Condition No.

(1)

(2)

(3)

(4)

(5)

1.

Any Chapter

Goods specified in the List annexed to this Table required in connection with:

  1. Petroleum operations undertaken under petroleum exploration licenses or mining leases, granted by the  Government of India or any State Government to the Oil and Natural Gas Corporation or Oil India Limited on nomination basis, or
  2. Petroleum operations undertaken under specified contracts, or
  3. Petroleum operations undertaken under specified contracts under the New Exploration Licensing Policy, or
  4. Petroleum operations undertaken under specified contracts under the Marginal Field Policy (MFP), or
  5. Coal bed methane operations undertaken under specified contracts under the Coal Bed Methane Policy.

1[6. Petroleum operations or coal bed methane operations undertaken under specified contracts under the Hydrocarbon Exploration Licensing Policy (HELP) or Open Acreage Licensing Policy (OALP)]

5%

1

 

 

 

ANNEXURE

 

Condition No

Conditions

1.

If,-

(a) the goods are supplied to,-

 (i) the Oil and Natural Gas Corporation or Oil India Limited (hereinafter referred to as the “licensee”) or a sub-contractor of the licensee and in each case in connection with petroleum operations to be undertaken under petroleum exploration licenses or mining leases, as the case may be, granted by the Government of India or any State Government on nomination basis; or

(ii) an Indian Company or Companies, a Foreign Company or Companies, or a consortium of an Indian Company or Companies and a Foreign Company or Companies (hereinafter referred to as the “contractor”) or a sub-contractor of the contractor and in each case in connection with petroleum operations to be undertaken under a contract with the Government of India; or

 (iii) an Indian Company or Companies, a Foreign Company or Companies, or a consortium of an Indian Company or Companies and a Foreign Company or Companies (hereinafter referred to as the “contractor”) or a sub-contractor of such Company or Companies or such consortium and in each case in connection with petroleum operations or coal bed methane operations, as the case may be, to be undertaken under a contract signed with the Government of India, on or after the 1st day of April,1998, under the New Exploration Licensing Policy, or on or after the 1st day of April 2001 in terms of the Coal Bed Methane Policy, or on or after the 14th day of October, 2015 in terms of the Marginal Field Policy, as the case may be;

 (b) where the recipient of outward supply of goods,-

 (i) is a licensee, he produces to the Deputy Commissioner of Central tax or the Assistant Commissioner of Central tax or the Deputy Commissioner of State tax or the Assistant Commissioner of State tax, as the case may be, having jurisdiction over the supplier of goods, at the time of outward supply of goods, the following, namely, a certificate from a duly authorised officer of the Directorate General of Hydro Carbons in the Ministry of Petroleum and Natural Gas, Government of India, to the effect that the goods are required for petroleum operations referred to in sub-clause (i) of clause (a);

(ii) is a contractor, he produces to the Deputy Commissioner of Central tax or the Assistant Commissioner of Central tax or the Deputy Commissioner of State tax or the Assistant Commissioner of State tax, as the case may be, having jurisdiction over the supplier of goods, at the time of outward supply of goods, a certificate from a duly authorised officer of the Directorate General of Hydro Carbons in the Ministry of Petroleum and Natural Gas, Government of India, to the effect that the goods are required for

(A) petroleum operations referred to in sub-clause (ii) of clause (a) under the contract referred to in that sub-clause, or

(B) petroleum operations or coal bed methane operations referred to in sub-clause (iii) of clause (a), as the case may be, under a contract signed under the New Exploration Licensing Policy or the Coal Bed Methane Policy or the Marginal Field Policy, as the case may be;

(C) where the recipient of outward supply of goods is a sub-contractor, he produces to the Deputy Commissioner of Central tax or the Assistant Commissioner of Central tax or the Deputy Commissioner of State tax or the Assistant Commissioner of State tax, as the case may be, having jurisdiction over the supplier of goods, at the time of outward supply, the following, namely :-

 (i) a certificate from a duly authorised officer of the Directorate General of Hydro Carbons in the Ministry of Petroleum and Natural Gas, Government of India, to the effect that the goods are required for :-

 (A) petroleum operations referred to in sub-clause (i) of clause (a) under the licenses or mining leases, as the case may be, referred to in that sub-clause and containing the name of such sub-contractor, or

 (B) petroleum operations referred to in sub-clause (ii) of clause (a) under the contract referred to in that sub-clause and containing, the name of such sub- contractor, or

(C) petroleum operations or coal bed methane operations, as the case may be, referred to in sub- clause (iii) of clause (a) under a contract signed under the New Exploration Licensing Policy or the Coal Bed Methane Policy or the Marginal Field Policy, as the case may be, and containing the name of such sub-contractor;

(ii) an affidavit to the effect that such sub-contractor is a bonafide subcontractor of the licensee or lessee or contractor, as the case may be;

(iii) an undertaking from such licensee or lessee or contractor, as the case may be, binding him to pay any tax, fine or penalty that may become payable, if any of the conditions of this entry are not complied with by such sub-contractor or licensee or lessee or contractor, as the case may be;

 (d) where the goods so supplied to the licensee or a sub-contractor of the licensee, or the contractor or a sub-contractor of the contractor are sought to be transferred to another sub-contractor of the licensee or another licensee or a sub- contractor of such licensee, or another subcontractor of the contractor or another contractor or a subcontractor of such contractor (hereinafter referred to as the “transferee”), such transferee produces to the Deputy Commissioner of Central tax or the Assistant Commissioner of Central tax or the Deputy Commissioner of State tax or the Assistant Commissioner of State tax, as the case may be, having jurisdiction over such transferee, at the time of such transfer, the following, namely:-

(i) a certificate from a duly authorised officer of the Directorate General of Hydro Carbons in the Ministry of Petroleum and Natural Gas, Government of India, to the effect that the said goods may be transferred in the name of the transferee and that the said goods are required for petroleum operations to be undertaken under :-

(A) petroleum exploration or mining leases referred to in sub-clause (i) of clause (a), or

 (B) petroleum operations to be undertaken under a contract referred to in sub-clause (ii) of clause (a), or

(C) petroleum operations or coal bed methane operations, as the case may be, to be undertaken under a contract referred to in sub-clause (iii) of clause (a)

(ii) undertaking from the transferee to comply with all the conditions of this entry, including that he shall pay tax, fine or penalty that may become payable, if any of the conditions of this entry are not complied with by himself, where he is the licensee/ contractor or by the licensee/ contractor of the transferee where such transferee is a sub-contractor.

 (iii) a certificate,-

(A) in the case of a petroleum exploration license or mining lease, as the case may be, granted by the Government of India or any State Government on nomination basis, that no foreign exchange remittance is made for the transfer of such goods undertaken by the transferee on behalf of the licensee or lessee, as the case may be;

 (B) in the case of a contract entered into by the Government of India and a Foreign Company or Companies or, the Government of India and a consortium of an Indian Company or Companies and a Foreign Company or Companies, that no foreign exchange remittance is made for the transfer of such goods undertaken by the transferee on behalf of the Foreign Company or Companies, as the case may be:

Provided that nothing contained in this sub-clause shall apply if such transferee is an Indian Company or Companies.

(e) where the goods so supplied are sought to be disposed of, the recipient of outward supply or the transferee, as the case may be, may pay the tax which would have been payable but for the exemption contained herein, on the depreciated value of such goods subject to the condition that the recipient of outward supply or the transferee, as the case may be, produces before the Deputy Commissioner of Central tax or the Assistant Commissioner of Central tax or the Deputy Commissioner of State tax or the Assistant Commissioner of State tax, as the case may be, having jurisdiction over the supplier of goods, a certificate from a duly authorised officer of the Directorate General of Hydro Carbons in the Ministry of Petroleum and Natural Gas, Government of India, to the effect that the said goods are no longer required for the petroleum operations or coal bed methane operations, and the depreciated value of the goods shall be equal to the original value of the goods at the time of import reduced by the percentage points calculated by straight line method as specified below for each quarter of a year or part thereof from the date of clearance of the goods, namely:-

 (i) for each quarter in the first year at the rate of 4 per cent.;

(ii) for each quarter in the second year at the rate of 3 per cent.;

(iii) for each quarter in the third year at the rate of 2.5 per cent.; and

 (iv) for each quarter in the fourth year and subsequent years at the rate of 2 per cent., subject to the maximum of 70 per cent

2[Provided that where the said goods so supplied are sought to be disposed of in non-serviceable form, after mutilation, the recipient of outward supply or the transferee, as the case may be, may at his option, pay the tax at the rate of 18 per cent. on transaction value of such goods subject to the condition that the recipient of outward supply or the transferee, as the case may be, produces before the Deputy Commissioner of Central tax or the Assistant Commissioner of Central tax or the Deputy Commissioner of State tax or the Assistant Commissioner of State tax, as the case may be, having jurisdiction over the supplier of goods, a certificate from a duly authorised officer of the Directorate General of Hydro Carbons in the Ministry of Petroleum and Natural Gas, Government of India, to the effect that the said goods are non-serviceable and have been mutilated before disposal.]

 

                       List

                         [See S.No.1 of the Table]

 

  1. Land Seismic Survey Equipment and accessories, requisite vehicles including those for carrying the equipment, seismic survey vessels, global positioning system and accessories, and other materials required for seismic  work  or  other  types of Geophysical and Geochemical surveys for onshore and offshore activities.
  2. All types of drilling rigs, jackup rigs, submersible rigs, semi-submersible rigs, drill ships, drilling barges,  shot-hole  drilling  rigs,  mobile  rigs,  workover rigs consisting of various equipment and other drilling equipment required for drilling operations, snubbing units, hydraulic  workover  units,  self-elevating  workover platforms, Remote Operated Vessel (ROV).
  3. Helicopters including assemblies/parts.
  4. All  types  of  marine  vessels  to  support  petroleum  operations  including   work boats, barges, crew boats, tugs, anchor handling vessels, lay barges and supply boats, marine ship equipment including water maker, DP system and Diving system.
  5. All types of equipment/  units  for  specialised  services  like  diving, cementing, logging, casing repair, production testing, simulation and mud services,  oil field related    lab  equipment,    reservoir    engineering,    geological    equipment, directional  drilling, stimulation,  Coil  Tubing   units, Drill   Stem   Testing (DST), data   acquisition   and  processing,   solids   control,   fishing   (as   related   to downhole retrieval in oil field operations or coal bed  methane  operations), well control, blowout prevention(BOP), pipe  inspection  including  Non  Destructive Testing,  coring,  gravel  pack,   well completion  and  workover  for   oil/gas/CBM wells  including  wireline  and  downhole equipment.
  6. All types of casing pipes, drill pipes, production tubing, pup joints, connections, coupling, kelly, cross overs and swages, Drive Pipes.
  7. All types of drilling bits, including nozzles, breakers and related tools.
  8. All types  of  oil  field  chemicals  or  coal  bed  methane  chemicals including synthetic products used in petroleum or coal bed methane operations, oil well cement and cement additives, required for drilling, production and transportation of oil or gas.
  9. Process, production  and  well  platforms/  installation  for  oil,  gas  or  CBM and water injection including items forming part of the platforms/ installation and equipment required like process  equipment,  turbines,  pumps, generators, compressors,  primemovers,     water      makers,      filters      and      filtering equipment,   telemetery, telecommunication, tele-control and other material required for platforms/ installations.
  10. Line pipes for flow lines and trunk pipelines including weight-coating and wrapping.
  11. Derrick barges, Mobile  and  stationary  cranes,  trenchers,  pipelay  barges, cargo barges and  the  like  required  in  the  construction/  installation  of  platforms and laying  of pipelines.

 

  1. Single buoy mooring systems, mooring ropes,  fittings  like  chains, shackles, couplings marine hoses and oil tankers to be used for oil storage and connected equipment, Tanks used for storage  of  oil,  condensate,  coal  bed  methane, water, mud,  chemicals  and related materials.
  2. All types of fully equipped  vessels  and  other  units  /equipment  required for pollution control, fire prevention,  fire  fighting,  safety  items  like  Survival Craft, Life  Raft,  fire and gas detection equipment, including H2S monitoring equipment.
  3. Mobile and skid mounted pipe laying, pipe testing and pipe inspection equipment.
  4. All types of valves including high pressure valves.
  5. Communication equipment required for petroleum or coal bed methane operations including synthesized VHF Aero and VHF multi channel sets/ VHF marine multi channel sets.
  6. Non-directional radio beacons, intrinsically safe walkie-talkies, directional finders, EPIRV, electronic individual security devices including electronic access control system.
  7. Specialized antenna system,  simplex  telex  over  radio  terminals,  channel micro wave systems, test and measurement equipment.
  8. X-band radar transponders, area surveillance system.
  9. Common depth point (CDP) cable, logging cable, connectors, geo-phone strings, perforation equipment and explosives
  10. Wellhead  and  Christmas  trees,  including  valves,  chokes,  heads  spools, hangers and actuators, flexible connections like chicksons  and  high  pressure  hoses, shut down panels.
  11. Cathodic Protection Systems including anodes.
  12. Technical drawings, maps, literature, data tapes, Operational and Maintenance Manuals required for petroleum or coal bed methane operations.
  13. Sub-assemblies, tools, accessories, stores, spares, materials, supplies, consumables for running, repairing or maintenance of the goods specified in this List.

 

Explanation. –

 

    1. In this notification, “tariff item”, “sub-heading” “heading” and “Chapter” shall mean respectively a tariff item, heading, sub-heading and Chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975).

 

    2. The rules for the interpretation of the First Schedule to the said Customs Tariff Act, 1975, including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification.

 

2. This notification shall come into force with effect from the 1st day of July, 2017.

 

[F.No.354/117/2017-TRU]

 

 

 

(Mohit Tewari)

 Under Secretary to the Government of India

 

Notes:

 

Sr. No.

Change

Notification No.

Applicability date

Particulars of change

Remarks

1.

Inserted

16\2019-Integrated Tax (Rate) dated September 30th, 2019

October 01st, 2019

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2.

Inserted

16\2019-Integrated Tax (Rate) dated September 30th, 2019

October 01st, 2019

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