[TO BE PUBLISHED IN PART II, SECTION 3, SUB-SECTION (i) OF THE GAZETTE OF INDIA, EXTRAORDINARY]

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(Department of Revenue)

Notification No.3/2017-Central Tax (Rate)

New Delhi, the 28th June, 2017

• (E).- In exercise of the powers conferred by sub-section (1) of section 11 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby exempts intra-State supplies of goods, the description of which is specified in column (3) of the Table below read with relevant List appended hereto and falling under the tariff item, sub-heading, heading or Chapter, as the case may be, as specified in the corresponding entry in column (2) of the said Table, from so much of the central tax leviable thereon under section 9 of the Central Good and Services Tax Act, 2017 (12 of 2017) as is in excess of the amount calculated at the rate specified in the corresponding entry in column (4) of the said Table and subject to the relevant conditions annexed to this notification, as specified in the corresponding entry in column (5) of the Table

TABLE

ANNEXURE

(B) petroleum operations or coal bed methane operations referred to in sub-clause (iii) of clause (a), as the case may be, under a contract signed under the New Exploration Licensing Policy or the Coal Bed Methane Policy or the Marginal Field Policy, as the case may be;

• 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 tax or the Assistant Commissioner of State tax, as the case may be, having jurisdiction over the supplier of goods, at the time of outward supply, the following, namely :-
  • a certificate from a duly authorised officer of the Directorate General of Hydro Carbons in the Ministry of Petroleum and Natural Gas, Government of India, to the effect that the goods are required for :-
    • petroleum operations referred to in sub-clause (i) of clause
      • under the licenses or mining leases, as the case may be, referred to in that sub-clause and containing the name of such sub-contractor, or
    • petroleum operations referred to in sub-clause (ii) of clause
      • under the contract referred to in that sub-clause and containing, the name of such sub- contractor, or
    • petroleum operations or coal bed methane operations, as the case may be, referred to in sub- clause (iii) of clause (a) under a contract signed under the New Exploration Licensing Policy or the Coal Bed Methane Policy or the Marginal Field Policy, as the case may be, and containing the name of such sub-contractor;
  • an affidavit to the effect that such sub-contractor is a bonafide sub- contractor of the licensee or lessee or contractor, as the case may be;
  • an undertaking from such licensee or lessee or contractor, as the case may be, binding him to pay any tax, fine or penalty that may become payable, if any of the conditions of this entry are not complied with by such sub-contractor or licensee or lessee or contractor, as the case may be;
• where the goods so supplied to the licensee or a sub-contractor of the licensee, or the contractor or a sub-contractor of the contractor are sought to be transferred to another sub-contractor of the licensee or another licensee or a sub- contractor of such licensee, or another sub- contractor of the contractor or another contractor or a subcontractor of such contractor (hereinafter referred to as the “transferee”), such transferee produces to the Deputy Commissioner of Central tax or the Assistant Commissioner of Central tax or the Deputy Commissioner of State tax or the Assistant Commissioner of State tax, as the case may be, having jurisdiction over such transferee, at the time of such transfer, the following, namely:-
  • a certificate from a duly authorised officer of the Directorate General of Hydro Carbons in the Ministry of Petroleum and Natural Gas, Government of India, to the effect that the said goods may be transferred in the name of the transferee and that the said goods are

required for petroleum operations to be undertaken under :-

• petroleum exploration or mining leases referred to in sub-clause

• of clause (a), or
  • petroleum operations to be undertaken under a contract referred to in sub-clause (ii) of clause (a), or
  • petroleum operations or coal bed methane operations, as the case may be, to be undertaken under a contract referred to in sub-clause (iii) of clause (a)
• undertaking from the transferee to comply with all the conditions of this entry, including that he shall pay tax, fine or penalty that may become payable, if any of the conditions of this entry are not complied with by himself, where he is the licensee/ contractor or by the licensee/ contractor of the transferee where such transferee is a sub-contractor;
• a certificate,-
  • in the case of a petroleum exploration license or mining lease, as the case may be, granted by the Government of India or any State Government on nomination basis, that no foreign exchange remittance is  made  for  the  transfer  of  such goods undertaken by the transferee on behalf  of  the licensee or lessee, as the case may be;
  • in the case of  a  contract  entered  into  by  the  Government of India and a Foreign Company or Companies or, the Government of India and a consortium of an Indian Company or Companies and a Foreign Company or Companies, that no foreign exchange remittance is made for the  transfer  of such goods undertaken by the transferee on behalf of the Foreign Company or Companies, as the case may be:

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

• where the goods so supplied are sought to be disposed of, the recipient of 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 the recipient of outward supply or the transferee, as the case may be, produces before the Deputy Commissioner of Central tax or the Assistant Commissioner of Central tax or the Deputy Commissioner of State tax or the Assistant Commissioner of State tax, as the case may be, having jurisdiction over the supplier of goods, a certificate from a duly authorised officer of the Directorate General of Hydro Carbons in the Ministry of Petroleum and Natural Gas, Government of India, to the effect that the said goods are no longer required for the petroleum operations or coal bed methane operations, and the depreciated value of the goods shall be equal to the original value of the goods at the time of import reduced by the percentage points calculated by straight line method as specified below for each quarter of a year or part thereof from the date of clearance of the goods, namely:-
  • for each quarter in the first year at the rate of 4 per ;
  • for each quarter in the second year at the rate of 3 per ;
  • for each quarter in the third year at the rate of 5 per cent.; and

List

[See S.No.1 of the Table]

• Land Seismic Survey Equipment and accessories, requisite vehicles including those for carrying the  equipment,  seismic  survey   vessels,   global   positioning   system and accessories,   and   other   materials   required   for   seismic   work    or    other types   of Geophysical and Geochemical surveys for onshore and offshore
• All types of drilling rigs, jackup rigs, submersible rigs, semi-submersible rigs, drill ships, drilling barges, shot-hole drilling  rigs,  mobile  rigs,  workover rigs  consisting of various equipment and other drilling equipment required for drilling operations, snubbing units,  hydraulic  workover  units,  self-elevating  workover  platforms, Remote Operated Vessel (ROV).
• Helicopters including assemblies/parts.
• All types  of  marine  vessels  to  support  petroleum  operations   including   work boats, barges, crew boats, tugs, anchor handling vessels, lay barges and supply boats, marine ship equipment including water maker, DP system and Diving
• All types of equipment/ units for specialised services like diving, cementing, logging, casing repair, production testing, simulation and mud services, oil field related  lab  equipment,    reservoir    engineering,    geological    equipment, directional  drilling, stimulation,  Coil  Tubing  units, Drill   Stem   Testing (DST), data  acquisition  and processing,  solids  control,  fishing  (as  related   to downhole retrieval in oil field operations or coal bed methane operations), well control, blowout prevention(BOP), pipe inspection including  Non  Destructive Testing, coring, gravel pack,  well completion  and  workover  for  oil/gas/CBM wells  including wireline  and  downhole
• All types of casing pipes, drill pipes, production tubing, pup joints, connections, coupling, kelly, cross overs and swages, Drive
• All types of drilling bits, including nozzles, breakers and related
• All types of oil  field  chemicals  or  coal  bed  methane  chemicals  including synthetic products used in petroleum or coal bed methane operations, oil well cement and cement additives, required for drilling, production and transportation of oil or
• Process, production and well platforms/ installation for oil, gas or  CBM  and water injection including items forming part of the platforms/ installation and equipment required like  process  equipment,  turbines,  pumps,  generators, compressors, primemovers,     water     makers,      filters      and      filtering equipment,   telemetery, telecommunication, tele-control and other material required for platforms/
• Line pipes for flow lines and trunk pipelines including weight-coating and
• Derrick barges, Mobile and stationary cranes, trenchers, pipelay barges, cargo barges and the like required in the construction/ installation of platforms and laying of
• Single buoy mooring systems, mooring ropes, fittings  like  chains,  shackles, couplings marine hoses and oil tankers to be used for oil storage and connected equipment, Tanks used for storage of oil, condensate, coal bed  methane,  water, mud,  chemicals  and related

• All types of fully equipped vessels and other units /equipment required for pollution control, fire prevention, fire fighting, safety items  like  Survival  Craft, Life Raft, fire and gas detection equipment, including H2S monitoring
• Mobile and skid mounted pipe laying, pipe testing and pipe inspection
• All types of valves including high pressure
• Communication equipment required for petroleum or coal bed methane operations including synthesized VHF Aero and VHF multi channel sets/ VHF marine multi channel
• Non-directional radio beacons, intrinsically safe walkie-talkies, directional finders, EPIRV, electronic individual security devices including electronic access control
• Specialized antenna system, simplex telex over radio terminals, channel  micro wave systems, test and measurement
• X-band radar transponders, area surveillance
• Common depth point (CDP) cable, logging cable, connectors, geo-phone strings, perforation equipment and explosives
• Wellhead and Christmas trees, including valves, chokes,  heads  spools,  hangers and actuators, flexible connections like chicksons and high pressure hoses,  shut down
• Cathodic Protection Systems including
• Technical drawings, maps, literature, data tapes, Operational and Maintenance Manuals required for petroleum or coal bed methane
• Sub-assemblies, tools, accessories, stores, spares, materials, supplies, consumables for running, repairing or maintenance of the goods specified in this

Explanation. –

• In this notification, “tariff item”, “sub-heading” “heading” and “Chapter” shall mean respectively a tariff item, heading, sub-heading and Chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975).
• The rules for the interpretation of the First Schedule to the said Customs Tariff Act, 1975, including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this

2. This notification shall come into force with effect from the 1st day of July, 2017.

[F.No.354/117/2017-TRU]

(Mohit Tewari)

Under Secretary to the Government of India