Finance Ministry to exempt rupee payment to Iran

edward222 · Jan 12, 2016

Credit to: Tax News : Finance Ministry to exempt rupee payment to Iran

NEW DELHI: The Finance Ministry will exempt payments to Iran from hefty withholding tax if the Persian Gulf nation were to receive full payment for oil it sells to India in rupees.

With sanctions against Tehran blocking payment channels, 45 per cent of the oil India imports from Iran are settled in rupees since January 2012. The remaining gets accumulated and cleared as and when easing of sanctions opens payment window.

In June last year, Iran agreed to receiving all of the payment in rupees but wanted waiver of 40 per cent withholding tax.

Finance Ministry is agreeable to such waiver, a senior government official said.

The Budget for 2012-13 had exempted Indian refiners from paying withholding tax when paying 45 per cent of dues in rupees to Iran. The same benefit will be extended to 100 per cent payments made in rupees, he said.

As of now, Indian refiners owe Iran $5.8 billion.
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