S. No.

Condition No.

(1)

(5)

(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 operation undertaken under specified contracts under the Coal Bed Methane Policy.

2.5%

1

Condition
No.

Conditions

1

(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 thelicensee and in each case in connection with petroleum operations tobe undertaken under petroleum exploration licenses or miningleases, as the case may be, granted by the Government of India orany 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 Companiesand a Foreign Company or Companies (hereinafter referred to as the contractor) or a sub-contractor of the contractor and in each casein 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 Companiesand a Foreign Company or Companies (hereinafter referred to as thecontractor) or a sub-contractor of such Company or Companies orsuch consortium and in each case in connection with petroleumoperations or coal bed methane operations, as the case may be, to beundertaken under a contract signed with the Government of India,on or after the 1st day of April,1998, under the New ExplorationLicensing Policy, or on or after the 1st day of April 2001 in terms ofthe 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 Centraltax or the Assistant Commissioner of Central tax or the Deputy Commissioner of State tax or the Assistant Commissioner of Statetax, as the case may be, having jurisdiction over the supplier ofgoods, at the time of outward supply of goods, the following,namely, a certificate from a duly authorized officer of the Directorate General of Hydro Carbons in the Ministry of Petroleumand Natural Gas, Government of India, to the effect that the goodsare required for petroleum operations referred to in sub-clause (i) ofclause (a);

(ii) is a contractor, he produces to the Deputy Commissioner of Centraltax or the Assistant Commissioner of Central tax or the DeputyCommissioner of State tax or the Assistant Commissioner of Statetax, as the case may be, having jurisdiction over the supplier ofgoods, at the time of outward supply of goods, a certificate from aduly authorized officer of the Directorate General of Hydro Carbonsin 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, or3

(B) petroleum operations or coal bed methane operationsreferred to in sub-clause (iii) of clause (a), as the case maybe, under a contract signed under the New ExplorationLicensing Policy or the Coal Bed Methane Policy or theMarginal 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 taxor the Assistant Commissioner of State tax, as the case may be, havingjurisdiction over the supplier of goods, at the time of outward supply, thefollowing, namely :-

(i) a certificate from a duly authorized officer of the DirectorateGeneral of Hydro Carbons in the Ministry of Petroleum and NaturalGas, Government of India, to the effect that the goods are requiredfor :-

(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 ofsuch sub-contractor, or

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

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

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

(iii) an undertaking from such licensee or lessee or contractor, as thecase may be, binding him to pay any tax, fine or penalty that maybecome payable, if any of the conditions of this entry are notcomplied with by such sub-contractor or licensee or lessee orcontractor, 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 subcontractor of the contractor aresought to be transferred to another sub-contractor of the licensee oranother licensee or a sub- contractor of such licensee, or another subcontractorof the contractor or another contractor or a subcontractor ofsuch contractor (hereinafter referred to as the transferee), such transferee produces to the Deputy Commissioner of Central tax or theAssistant Commissioner of Central tax or the Deputy Commissioner ofState tax or the Assistant Commissioner of State tax, as the case may be,having jurisdiction over such transferee, at the time of such transfer, thefollowing, namely:-

(i) a certificate from a duly authorized officer of the DirectorateGeneral of Hydro Carbons in the Ministry of Petroleum and NaturalGas, Government of India, to the effect that the said goods may betransferred in the name of the transferee and that the said goods are 4required 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 referredto in sub-clause (ii) of clause (a), or

(C) petroleum operations or coal bed methane operations, as thecase may be, to be undertaken under a contract referred to insub-clause (iii) of clause (a)

(ii) undertaking from the transferee to comply with all the conditions ofthis entry, including that he shall pay tax, fine or penalty that maybecome payable, if any of the conditions of this entry are notcomplied with by himself, where he is the licensee/ contractor or bythe licensee/ contractor of the transferee where such transferee is asub-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 anyState Government on nomination basis, that no foreignexchange remittance is made for the transfer of suchgoods undertaken by the transferee on behalf of thelicensee or lessee, as the case may be;

(B) in the case of a contract entered into by the Governmentof India and a Foreign Company or Companies or, theGovernment of India and a consortium of an Indian Companyor Companies and a Foreign Company or Companies, that noforeign exchange remittance is made for the transfer ofsuch goods undertaken by the transferee on behalf of theForeign Company or Companies, as the case may be:

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

(e) where the goods so supplied are sought to be disposed of, the recipientof 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 therecipient of outward supply or the transferee, as the case may be,produces before the Deputy Commissioner of Central tax or theAssistant Commissioner of Central tax or the Deputy Commissioner ofState tax or the Assistant Commissioner of State tax, as the case may be,having jurisdiction over the supplier of goods, a certificate from a dulyauthorized officer of the Directorate General of Hydro Carbons in theMinistry of Petroleum and Natural Gas, Government of India, to theeffect that the said goods are no longer required for the petroleumoperations or coal bed methane operations, and the depreciated value ofthe goods shall be equal to the original value of the goods at the time ofimport reduced by the percentage points calculated by straight linemethod as specified below for each quarter of a year or part thereof fromthe 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 5

(iv) for each quarter in the fourth year and subsequent years at the rate of2 per cent.,
subject to the maximum of 70 per cent.