【NishithDesai】印度石油和天然气行业概览-从NELP到HELP及以后-2025.3

MUMBAISILICONVALLEYBENGALURUSINGAPORENEWDELHINEWYORKGIFTCITY

Research

India’s

OiI&GasSector一ataGIance?

FromNELPtoHELPandBeyond

March2025

©NishithDesaiAssociates2025

©NishithDesaiAssociates2025concierge@

©NishithDesaiAssociates2025

Research

India’s

OiI&GasSector一ataGIance?

FromNELPtoHELPandBeyond

March2025

DMSCode:120090.2

©NishithDesaiAssociates2025concierge@

©NishithDesaiAssociates2025

Rankedasthe‘MostInnovativeIndianLawFirm’intheprestigiousFTInnovativeLawyers

AsiaPacificAwardsformultipleyears.Alsorankedamongstthe‘MostInnovativeAsiaPacificLawFirm’intheseeliteFinancialTimesInnovationrankings.

llwwL

%equoliri

lndia’sOiI&GasSector一ataGIance?—FromNELPtoHELPandBeyond

©NishithDesaiAssociates2025Provideduponrequestonly

Disclaimer

ThisreportisacopyrightofNishithDesaiAssociates.Noreadershouldactonthebasisofanystatementcontainedhereinwithoutseekingprofessionaladvice.Theauthorsandthefirmexpresslydisclaimallandanyliabilitytoanypersonwhohasreadthisreport,orotherwise,inrespectofanything,andofconsequencesofanythingdone,oromittedtobedonebyanysuchpersoninrelianceuponthecontentsofthisreport.

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Acknowledgements

SachChabria

sach.chabria@

MorviChaturvedi

morvi.chaturvedi@

AdityaMacedo

aditya.macedo@

PalomitaSharma

palomita.sharma@

lndia’sOiI&GasSector-ataGIance?—FromNELPtoHELPandBeyond

©NishithDesaiAssociates2022Provideduponrequestonly

Contents

Glossary1

3

Introduction

5

IndustryataGlance

I.Importsinfinancialyear2023-20245

II.Export5

III.MajorIndustryPlayers6

RecentInitiativesbytheGovernmentofIndia7

8

ForeignInvestment

9

RegulatoryandLegalFramework

I.LegalFramework10

II.RegulatoryFramework16

19

TheDiscoveredSmallFieldsPolicyandBiddingRound

I.Overview19

II.SalientFeaturesofDiscoveredSmallFieldsPolicy20

22

HydrocarbonExplorationandLicensingPolicy(HELP)

I.Overview22

II.UniformLicense22

III.RevenueSharingModel22

IV.MarketingandPricingFreedomforCrudeOilandNaturalGas23

V.OpenAcreagePolicy23

VI.OtherChanges24

lndia’sOiI&GasSector一ataGIance?—FromNELPtoHELPandBeyond

©NishithDesaiAssociates2025Provideduponrequestonly

HydrocarbonExploration&LicensingPolicy(HELP)OpenAcreage

LicensingPolicy(OALP)BidRound一125

I.TheBiddingProcess25

DisputeResolution30

I.ConciliationandMediation31

II.Arbitration31

III.Litigation32

Conclusion34

lndia’sOiI&GasSector–ataGIance?—FromNELPtoHELPandBeyond

GIossary

Abbreviation

ConstitutionDGH

E&PFDl

HELPlBEF

MoPNGNELP

ONGCO&NG

OlDBPSC

PSU

ReguIatoryBoardOPEC

LNG

MMTDlPP

BCMMT

BPCL

OiIFieIdsAct

PetroIeumRuIes

PNGReguIatoryBoardActlTA

MAT

DDT

STT

HUF(s)MLl

BEPSGAAR

CBDT

ParticuIars

ConstitutionofIndia,1950

DirectorateGeneralofHydrocarbonsExplorationandProduction

ForeignDirectInvestment

HydrogenExplorationandLicensingIndiaBrandEquityFoundation

MinistryofPetroleumandNaturalGasNewExplorationLicensingPolicy

OilandNaturalGasCorporation

OilandNaturalGas

OilIndustryDevelopmentBoardProductionSharingContracts

PublicSectorUndertaking

PetroleumandNaturalGasRegulatoryBoard

OrganizationofPetroleumExportingCountriesLiquefiedNaturalGas

MillionMetricTonne

DepartmentofindustrialPolicyandPromotionBillionCubicMeters

Milliontonne

BharatPetroleumCorporationLimited

TheOilfields(RegulationandDevelopment)Act,1948

PetroleumandNaturalGasRules,1959

ThePetroleumandNaturalGasRegulatoryBoardAct,2006

Income-taxAct,1961

MinimumAlternateTax

DividendDistributionTax

SecuritiesTransferTax

HinduUndividedFamily

MultilateralConventiontoImplementTaxTreatyRelatedMeasurestoPreventBaseErosionandProfitShifting

BaseErosionandProfitShiftingGeneralAnti-AvoidanceRules

CentralBoardofDirectTaxes

©NishithDesaiAssociates2025Provideduponrequestonly

1

lndia’sOiI&GasSector–ataGIance?—FromNELPtoHELPandBeyond

2©NishithDesaiAssociates2025Provideduponrequestonly

VAT

ValueAddedTax

GST

GoodsandServicesTax

CGST

CentralGST

SGST

StateGST

lGST

IntegratedGST

OiIDeveIopmentAct

OilIndustry(Development)Act,1974

OlSD

OilIndustrySafetyDirectorate

DSFBidRound

DiscoveredSmallFieldsPolicy1andBiddingRound

DSFPoIicy

DiscoveredSmallFieldsPolicy

CCUS

CarbonCaptureUtilizationandStorage

OALP

OpenAcreageLicensingPolicy

NDR

NationalDataRepository

EOl

ExpressionofInterest

NlO

NoticeInvitingOffers

LRP

LowerrevenuePoint

HRP

HigherrevenuePoint

NPV

NetPresentValue

RSC

RevenueSharingContract

MSRC

ModelSharingRevenueContract

lndia’sOiI&GasSector-ataGIance?—FromNELPtoHELPandBeyond

lntroduction

Indiaisoneofthefastestgrowingmajoreconomiesintheworldandthethirdlargestconsumerofpetroleumproducts,afterUSandChina.1Althoughthereisanincreasedfocusonincentivisingenergyproductionthroughgasandrenewables,demandforoilhasalwaysbeenontherise,andisestimatedtogrowatleastuntil2040.2AsperthereportpublishedbyIndiaBrandEquityFoundation(IBEF),3India’senergydemandisexpectedtonearlydoubleto1,123milliontonnesofoilequivalent(Mtoe)by2045from723.9Mtoein2016.Moreover,India’sshareinglobalprimaryenergyconsumptionisprojectedtoincreasebytwo-foldsby2045.4

India’scrudeoilimportsincreasedby3.7percentduringthefirstninemonthsofthefiscalyear2024-25,reachingUSD102.5billion,upfromUSD98.8billioninthesameperiodofthepreviousfiscalyear.5.AccordingtotheOrganisationofPetroleumExportingCountries(OPEC),India’soildemandin2024isprojectedtobeat5.59millionbarrelsperday(b/d),upfrom5.37millionb/din2023,resultinginagrowthof4.1%,therebymakingitthethird-largestoilconsumingnationintheworld.Over2024and2025,Indiaaccountsfor25%oftotaloilconsumptiongrowthglobally.Weexpectanincreaseof0.9millionbarrelsperday(b/d)inglobalconsumptionofliquidfuelsin2024.6Indiaisthefourth-largestLiquefiedNaturalGas(LNG)importerafterJapan,SouthKoreaandChina,andaccountsforapproximately7percentofthetotalglobaltrade.7

India’spetroleumproductconsumptionrecordeda3.5%growthduringApril-JanuaryFY2024-25,reaching199.2millionmetrictonnes(MMT),comparedto192.5MMTinthesameperiodofthepreviousyear.IndiahasalwaysbeenanimportdependentnationintheOilandNaturalGas(“O&NG”)sector.India’stotalconsumptionofcrudeoilorpetroleumproductsrose4.6%infiscal2023-24(FY24)to233.3millionmetrictonne(MMT),whiledomesticproductionofcrudeoilrosemarginallyat0.6%.Thedomesticcrudeoilproductionwasalmostunchangedat29.4MMTin2023-24,comparedto29.2MMTinthepreviousyear.India’sdomesticcrudeoilproductionbarelymet12.3%ofitsoilneeds.8Naturalgasproductionhasshownamorepromisingtrend,withanincreaseindomesticoutputdrivenbydeepwaterprojectsintheKrishna-Godavaribasinandthenorth-east.India’snaturalgasproductioninFY25wasestimatedat35billioncubicmeters(BCM)9,whichpreviouslystoodat32.249billioncubicmetersin2017.10

1Availableat

http://www./specials/year-in-review-cautiousoptimism-has-returned-across-the-industry

Indian-oil-chief/article10007043.ece.

2Availableat

/Opinion/FjMgDDggOkPZ05qounbRjM/India-time-to-capitalize-on-oil-and-gas-sector.html

.

3IBEFisatrustestablishedbytheDepartmentofCommerce,MinistryofCommerceandIndustry,GovernmentofIndia.IBEFs

objectiveistopromoteandcreateinternationalawarenessoftheMadeinIndialabelinmarketsoverseasandtofacilitatedissemi-nationofknowledgeofIndianproducts.

4Availableat

/download/1736234704_Oil-and-Gas-November-2024.pdf

.

5Availableat

https://www.businessworld.in/article/indias-crude-import-bill-rises-by-37-in-april-december-fy25-545240?utm

.

6Availableat

/todayinenergy/detail.php?id=64084&utm

.

7Availableat

/india/indias-lng-imports-jumped-21-in-2024-as-gas-consumption-rose-11/

articleshow/117435636.cms?utm.

8Availableat

/economy/indias-crude-oil-consumption-up-4-6-in-fy24-output-rises-marginally-at-0-6-

imports-steady-ppac-11713885600547.html?utm.

9Availableat

https://energyasia.co.in/featured/economic-survey-2024-25-indias-oil-and-gas-sector-outlook/#utm

10Availableat

https:///industry/energy/oil-gas/yearthat-saw-oil-gas-production-switch-to-reve

-nue-sharing-mode/articleshow/62306282.cms.

©NishithDesaiAssociates2025Provideduponrequestonly

3

lndia’sOiI&GasSector一ataGIance?—FromNELPtoHELPandBeyond

4©NishithDesaiAssociates2025Provideduponrequestonly

lntroduction

InIndia,theO&NGindustryhashugepotentialandcontributesover15%totheGDP.ThelandscapeintheO&NGsectorpromisestobedynamicwithscopeforgrowthofbusinessentities.Thisindustryhasalwaysattractedforeigndirectinvestments,andaccordingtodatareleasedbytheDepartmentofIndustrialPolicyandPromotion(DIPP),thepetroleumandnaturalgassectorattractedFDIworthUSD8,200.84millionbetweenApril2000andSeptember2024.11Withonly10%ofthetotal3.36millionsq.kmofpotentialreservesbeingexploredasof2024,India’spoten-tialintheoilandgassectorisimmenseandthereexistsvastheadroomfornewdiscoveries.12

TherehasalsobeenanincreaseintherefiningofpetroleumproductsinIndia.IBEF’sreportsuggeststhatinfinancialyearendedMarch2024,Indiahad256.8MMTPAofrefiningcapacity,makingitthesecondlargestrefinerinAsia.Theriseinrefinedpetroleumproductsisprimarilydrivenbythemassivedomesticmarket.Separately,theGovernmentofIndia’spushtowardsagas-basedeconomy13isestimatedtopresentnewinvestmentsandopportunitiesinthisarea.India’sfocusonagas-basedeconomyisinlinewiththeglobalcommitmentmadeattheParismeetingonclimatechange,whichaimstoreduceIndia’scarbonemissionsbyupto35%from2005levelsby2030andproducing40%ofthepowerfromnon-fossilfuelsourcesby2030.ThesedevelopmentspresentanopportunityforIndia’sdownstreamandmidstreamoilandgassectors.

ThemarketsizeoftheIndianchemicalsandpetrochemicalssectorisexpectedtogrowtoapproxi-matelyUSD300billionby2025,upfromitscurrentmarketsizeofUSD220billion.14TheindustrycanpotentiallyenhanceIndia’sgrowththroughthedevelopmentofnicheproductsandpromotionofexports,giventhatIndiaisexpectedtoreceiveinvestmentsworthUSD87billioninthenextdecadetomeetthenation’srisingdemandforpetrochemicals.15

TheGovernmentofIndia,undertheConstitutionofIndia,1950(“Constitution”)hasthepowertolegislateinrespectofO&NG.LegislativepowersareconferredontheGovernmentofIndiaunderEntry53,toListIofScheduleVIIoftheConstitution.16Fromanindustryperspective,O&NGindustryisdividedintothreemajorsegments:

Upstream:Comprisesofactivitiespertainingtoexploration,recoveryandproductionofO&NG.Inindustryparlance,itissimplycalledExplorationandProduction.(“E&P”)

Midstream:Processes,stores,marketsandtransportscommoditiessuchascrudeoil,naturalgas,naturalgasliquids(liquefiednaturalgassuchasethane,propaneandbutane)andsulphur.

Downstream:Referstotherefiningofcrudeoilandthesellinganddistributionofnaturalgasandproductsderivedfromcrudeoil.

11Availableat

.in/sites/default/files/FDI%20Factsheet%20December_2024.pdf

.

12Availableat

https://futurefuels.in/4-unexplored-indian-basins-may-hold-more-oil/?utm

.

13Availableat

http://pib.nic.in/newsite/PrintRelease.aspx?relid=153957

.

14Availableat

.in/PressReleasePage.aspx?PRID=2066135&utm

.

15Availableat

/business/energy/india-eyes-87-bln-investment-petrochemicals-sector-over-next-decade

-says-2024-10-18/?utm.

16Regulationanddevelopmentofoilfieldsandmineraloilresources;petroleumandpetroleumproducts;otherliquidsandsubstancesdeclaredbyParliamentbylawtobedangerouslyinflammable.

lndia’sOiI&GasSector-ataGIance?—FromNELPtoHELPandBeyond

lndustryataGIance

l.lmportsinfinanciaIyear2023-20241

ItemQuantity[TMT]VaIue[Rs.(biIIion)]

CrudeOiI

234262

11051.76

LNG

23996

11099.4

PetroIeumProducts

48693

190069

ll.Export2

Item

Quantity[TMT]

VaIue[Rs.(biIIion)]

CrudeOiI

N.A.

N.A.

LNG

N.A.

N.A.

PetroIeumProducts

62593

39472.3

Thekeydomesticoilandgascompaniesare:3

CompanyFinanciaIYear2023totaIincomefromoperations(USDbiIIion)

lndianOiICorporationLimited

106.37

ReIiancelndustries

119.9

BharatPetroIeumCorporationLimited

61.20

HindustanPetroIeumCorporationLimited

55.76

ONGC

19.75

GAlLlndiaLimited

16.16

OiIlndiaLimited

4.52

1Availableat

.in/files/TableManagements/IPNG-Statistics-Report_2023-24_Final.pdf

.

2Available

.in/files/TableManagements/IPNG-Statistics-Report_2023-24_Final.pdf

.

3Availableat

/download/1736234704_Oil-and-Gas-November-2024.pdf

.

©NishithDesaiAssociates2025Provideduponrequestonly

5

lndia’sOiI&GasSector一ataGIance?—FromNELPtoHELPandBeyond

6©NishithDesaiAssociates2025Provideduponrequestonly

lndustryataGIance

ThekeyinternationaloilandgascompaniesoperatinginIndiaareCairnIndia,Shell,BGgroupandBritishPetroleum.4

lll.MajorlndustryPIayers5

ThemajorindustryplayersinIndia’sO&NGsectorcurrentlyare:

i.UpstreamSector:OilandNaturalGasCorporation(ONGC),OilIndiaLimitedandCrainEnergy.ONGCisthelargestupstreamcompanyinE&Psegmentaccountingforapproxi-mately70%ofIndia’stotaloilandgasoutput.DuringtheFinancialyear2016,1,118,000metersofwellswereexploredanddevelopedinIndia,andduringthesameperiod,506wellsweredrilledinIndia.

ii.MidstreamSector:IndianOilCorporation,GasAuthorityofIndiaLimited,etc.IndianOilCorporationoperatesa14,701kmnetworkofcrude,gasandproductpipelines,withacapacityof9406MMTPAofoiland20millionmetricstandardcubicmetersperday(mmscmd)ofgas.

iii.DownstreamSector:IndianOilCorporation,BharatPetroleumCorporationLimited,Hindu-stanpetroleum,etc.IndianOilCorporationisthelargestcompany,controlling11outof22Indianrefineries,withacombinedcapacityof80.7MTPA.

4Availableat

/download/Oil-and-Gas-April-2017.pdf

.

5Availableat

/download/1736234704_Oil-and-Gas-November-2024.pdf

.

lndia’sOiI&GasSector一ataGIance?—FromNELPtoHELPandBeyond

RecentlnitiativesbytheGovernmentoflndia

AspertheIBEFreport,1theGovernmentofIndiahastakensomekeyinitiativestopromotetheoilandgassector,whichareasfollows:

i.TheGovernmentofIndiahasannounceditsplanstomergestateoilcompaniestocreate

integratedoilmajor.Thisoilmajorwouldthencompetegloballyandutilizethesynergy

betweenvariousstateentitiesforachievingefficiencyandcostcompetitivenessinordertocreatemorevalueforallshareholders.

ii.TheGovernmentofIndiaplanstobuildaninemilliontonne(MT)refineryinRajasthananda60MTrefineryinMaharashtra,auctionoilandgasfields,increaseuseofliquefiednaturalgas(LNG).Further,theGovernmentofIndiaisindiscussionswithSaudiArabianOilCo

(SaudiAramco)regardinginvestmentsinIndia.

iii.TheGovernmentofIndiaplanstounveilanewpolicyforrenewingandextendingtheleaseof28oilandgasblocksinthecountry.Thisinitiativeisintendedtoattractmoreinvestmentsintothesefields.

iv.Inordertopromotecleanenergyandgenerateemployment,State-runoilfirmsareplanninginvestmentsworth(USD111.30million)inUttarPradeshtoimprovetheliquefiedpetro-

leumgas(LPG)infrastructure.

v.TheGovernmentofIndiaisplanningtointroduceanewpolicytoencouragetheuseof

biofuelsintransportfuel.Forthispolicy,theGovernmentofIndiaislookingataninvest-mentofRs1lakhcrore(USD15.64billion)intheentirevaluechain.2

1Availableat

/download/Oil_and_Gas-October-_2017.pdf

;alsosee

/industry/oil-gas

-india.aspx.

2Availableat

/download/Oil_and_Gas-October-_2017.pdf

;alsosee

/industry/oil-gas

-india.aspx.

©NishithDesaiAssociates2025Provideduponrequestonly

7

lndia’sOiI&GasSector一ataGIance?—FromNELPtoHELPandBeyond

8©NishithDesaiAssociates2025Provideduponrequestonly

Foreignlnvestment

InO&NGindustry,FDIisallowedthroughtheautomaticroute.FDIisallowed:1

Upto100%inareassuchasexplorationofoilandnaturalgasfields,infrastructure&marketingrelatedaspectsoftheindustry,refiningintheprivatesector,etc.;and

Upto49%inPSUsengagedinpetroleumrefining.However,inOctober2021,theDepartmentofEconomicAffairs,MinistryofFinanceissuedanotificationallowing100%FDIunderautomaticrouteforoilandgasPSUsincasean‘in-principle’approvalforstrategicdisinvest-mentofsuchPSUhasbeengrantedbytheGovernment.2Thispolicychangewasaimedatfacilitatingtheprivatizationofmajoroilcompanies,notablyBharatPetroleumCorporationLimited(BPCL),wherethegovernmentintendedtodivestitsentire52.98%stake.3

1Availableat

http://pib.nic.in/newsite/PrintRelease.aspx?relid=148494

.

2Availableat

/docs/

(Third-Amendment)-NDI-Rules-2021-dated-October5-2021.pdf.

3Availableat

/article/economy-policy/govt-permits-100-fdi-in-oil-psus-approved-for-strate

-gic-disinvestment-121072901473_1.html?utm.

lndia’sOiI&GasSector一ataGIance?—FromNELPtoHELPandBeyond

ReguIatoryandLegaIFramework

>

NitiAayog

PoIicy

>

PetroIeumAct,1934(lmport,transport,storage)

TheOiIfieIds(ReguIationandDeveIopment)

Act,1948(deveIopmentofoiIfieIds)

PetroIeumandNaturaIGasRuIes,1959

LegisIation

PetroIeumandNaturaIGasReguIatoryBoardAct,

2006

TheMinesAct,1952

TaxLaws

MinistryofPetroIeumandNaturaIGas

DirectorateGeneraIofHydrocarbons

ReguIatory

PetroIeumandNaturaIGasReguIatoryBoard

Authorities

OiIlndustryDeveIopmentBoard

OiIlndustrySafetyDirectorateandDirectorate

GeneraIofMineSafety

MinistryofFinance

>

>

>

>

>

>

>

>

>

>

>

©NishithDesaiAssociates2025Provideduponrequestonly

9

lndia’sOiI&GasSector一ataGIance?—FromNELPtoHELPandBeyond

10©NishithDesaiAssociates2025Provideduponrequestonly

ReguIatoryandLegaIFramework

l.LegaIFramework

A.ThemainIawsaffectingtheO&NGlndustryhavebeenexpIainedbeIow.

ThePetroleumAct,1934:ThisactregulatestheimportintoIndia,transferswithin,storage,production,refiningandblendingofpetroleumanddealssubstantiallywithmidstreamactivities.

TheOilfields(RegulationandDevelopment)Act,1948(“OilFieldsAct”):Thisactconsti-tutesthebasicstatuteforlicensingandleasingofpetroleumandgasblocksbyGovernmentofIndia,empoweringthegovernmentwithbroadauthoritytomakerulesprovidingforthebasicregulationofoilfieldsandforthedevelopmentofmineraloilresources.AlongwithPetroleumRules,theOilfieldsActgovernsthegrantofProductionExplorationLicenses,miningleasesandcollectionofroyalties.

ThePetroleumandNaturalGasRules,1959(“PetroleumRules”):Theserulesprovideaframeworkforgrantofexplorationlicensesandminingleases,andtogetherwiththePetroleumAct,1934,regulatethesaleanddistributionofpetroleumandpetroleumproducts.

ThePetroleumandNaturalGasRegulatoryBoardAct,2006(“PNGRegulatoryBoardAct”):ThisactprovidesforthesettingupofthePetroleumandNaturalGasRegulatoryBoardtoregulatetherefining,processing,storage,transportation,distribution,marketingandsaleofpetroleum,petroleumproductsandnaturalgas(excludingproductionofcrudeoilandnaturalgas).

NewExplorationLicensingPolicy(“NELP”):NELPwasformulatedbyGovernmentofIndiaandtheDGHasthenodalagencyin1997-98toprovidealevelplayingfieldtobothpublicandprivatesectorcompaniesinE&Pofhydrocarbons,thoughNELPisnotalawbyitselfandoperatesasapolicyframework.NELPpromotesinvestmentsinE&PSectorbyfacilitatingallotmentofexplorationblocksthroughinternationalcompetitivebidding.AlthoughtheNELPregimewassuccessfulintheearlydays,NELPVIIIandIXareoftencriticizedforitsfailuretoattractwidespreadparticipationbylargeinternationaloilandgasoperatorsandsince2009,andithasbeentheendeavorofGovernmentofIndiatochangethemodel.NELPhasnowbeenreplacedbytheHydrogenExplorationandLicensingPolicy.

HydrogenExplorationandLicensingPolicy(“HELP”):HELPaimstoenhancedomesticoilandgasproductionbyencouragingexplorationinsedimentarybasinsandintroducesanumberofmeasuresincludingauniformlicenseregimeforconventionalaswellasnon-conventionalhydrocarbons,anopenacreagelicensingpolicy,arevenuesharingmodelandfreedominmarketingandpricing(subjecttocertainlimits).1

TheMinesAct,1952andtheOilMinesRegulations,2017:Togethertheselegislationsgovernlaborsafetyandworkingconditionsinoilandgasextractionactivities,settingoutthedutiesofowners,agentsandmanagersaswellaspenaltiesforcontraventionoftheirobligations.

1Availableat

http://pib.nic.in/newsite/PrintRelease.aspx-?relid=137638

.

lndia’sOiI&GasSector一ataGIance?—FromNELPtoHELPandBeyond

ReguIatoryandLegaIFramework

B.TaxationLaws

i.CorporatelncomeTax

IncometaxinIndiaisleviedundertheIncome-taxAct,1961(“ITA”)readwithrelatedrules.Fordomesticcompanies,thetaxraterangesbetweenapproximately25%and30%,plusapplicablesurchargeandcess.2Generally,ataxrateof25%plusapplicablesurchargeandcessisleviedoncompanieswithaturnoveroflessthanINR4bn,3whilea30%taxrateplusapplicablesurchargeandcessisleviedoncompanieswithaturnoverexceedingINR4bn.

Additionally,domesticcompaniesmaychoosetobetaxedatarateof22%,plusa10%surchargeandapplicablecess,underSection115BAAoftheITA,subjecttocertainconditions.Thesecondi-tionsinclude:(i)totalincomebeingcomputedwithoutclaimingcertainspecifieddeductionsandexemptionsundertheITA(‘Deductions’);(ii)thecompanynotbeingallowedtosetoffanycurrentorcarriedforwardlossesordepreciationifsuchlossesareattributabletotheDeductions;

and(iii)thecompanyclaimingdepreciationinthemannerprescribedundertheITAbarringanyclaimofadditionaldepreciationundersection32(1)(iia).Onceexercised,theoptiontobetaxedunderthisprovisioncannotbewithdrawnandwillcontinuetoapplyforsubsequentassessmentyears.

Further,under115BABtotheITA,newmanufacturingcompaniessetuponorafterOctober1,2019,andthatstartmanufacturingonorpriortoMarch31,2024,mayavailareducedtaxrateof15%plusasurchargeof10%andapplicablecess