No double tax for RIL, RPL

Amar Singh failed to stop the government from granting export unit status and other benefits to Reliance Industries' two refineries. To add more to it, the oil ministry is now gearing up to offer local tax benefits to Mukesh Ambani, making good for Reliance's shortfall arising due to a drop in demand in global markets. The sky high crude oil prices meant a wind fall of profits for oil refining companies globally. But with crude now kissing the ground zero at multi-year lows, refiners such as Reliance Industries are trying to compensate a slump in overseas market demand with sales to government run oil companies. Learnt that the oil ministry has requested the commerce ministry to amend some rules for Special Economic Zones and Export oriented units, allowing Reliance Industries and Reliance Petroleum to sell petrol and diesel back home under deemed exports status without paying taxes twice. This could also help the government owned oil companies, which import about 3 million tonnes of oil products and help save roughly about $1-$1.5 billion of foreign exchange. However, for India, which imports about 120 million tonnes of crude with a bill of about $100 billion at peak, savings of $1.5 billion may not be a big number. But when we analyse closely, a saving of Rs 4000-Rs 5000 crore distributed among the three major oil marketing companies is definitely good news, even for RIL's future strategy for domestic markets.