 "India exempts rupee payment for Iran oil from hefty tax: sources")
New Delhi: India formally lifted a hefty tax on payments to National Iranian Oil Co (NIOC) for settling part of its oil purchases in Indian rupees, two sources at refineries said.
Finance Minister Pranab Mukherjee in March proposed to exempt oil payments to Iran in rupees from a 40 percent tax in order to smooth payments which have been hit by western sanctions against Tehran’s disputed nuclear programme.[caption id=“attachment_344114” align=“alignleft” width=“380” caption=“Rupee option. Reuters”]  [/caption]
India and Iran in January agreed to settle 45 percent of oil trade in rupees, which are not freely traded on international markets. Iran planned to use rupees to pay for imports from India but refiners were unwilling to make payments while the tax was in place.
“I have just received the notification … At this moment I can’t say whether we will start paying tomorrow or next week,” said a source at Hindustan Petroleum Corp.
The second source said, “There are certain terms that we have to fulfill then we can start making rupee payment.”
Reuters
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