Taxability of Cost of Petroleum

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....commercial discovery of petroleum, the contractors are entitled to recover from the sale proceeds all expenses incurred in exploration, development, production and payment of royalty. * Portion of the value of petroleum which the contractor is entitled to take in a year for recovery of these contract costs is called "Cost Petroleum". * The relationship of the oil exploration and production con....

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....eration for service to GOI and thus not taxable per se. * However, cost petroleum may be an indication of the value of mining or exploration services provided by operating member to the joint venture, in a situation where the operating member is found to be supplying service to the oil exploration and production joint venture. Important Notifications & Circulars * Clarification on scope of su....