Some companies in the oil and gas sector feel that the budget has not provided enough tax incentives for the upstream and the downstream segments of the sector.
For example, upstream companies were expecting the budget to remove service tax on service providers to E&P companies favourably, since that drains away a substantial part of the funds committed for exploration.
Downstream firms are disappointed because the finance minister has not removed the tax anomaly between branded and unbranded fuel, given that such fuel have been proved to increase engine efficiency and enhance their life, thereby reducing consumption.
But industry players welcomed the reintroduction of investment allowance for investments in plant and machinery of over Rs 100 crore. They feel that the move would encourage new investments and is a step in right direction.
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