Important Keyword: Notification 05/2018 GST, GST on profit petroleum, GST petroleum exploration India, CGST exemption oil and gas, GST PSC contracts India, Section 11 CGST exemption, GST natural gas mining India,
Words: 690 Read time: 4 minutes.
Table of Contents
[F. No.354/13/2018 -TRU]
Government of India
Ministry of Finance
(Department of Revenue)
New Delhi, the 25th January, 2018
Notification No. 05/2018 - Central Tax (Rate): Seeks to exempt Central Government's share of Profit Petroleum from Central tax
GST: [TO BE PUBLISHED IN THE GAZZETE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]
G.S.R (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, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby exempts the intra-State supply of services by way of grant of license or lease to explore or mine petroleum crude or natural gas or both, from so much of the central tax as is leviable on the consideration paid to the Central Government in the form of Central Government’s share of profit petroleum as defined in the contract entered into by the Central Government in this behalf.
(Ruchi Bisht)
Under Secretary to the
Government of India
📚 Frequently Asked Questions (FAQs): Notification No. 05/2018 – Central Tax (Rate)
Q1: What is Notification No. 05/2018 – Central Tax (Rate)?
Answer:
It is a GST notification issued on 25 January 2018 exempting GST on Central Government’s share of profit petroleum 5.
Q2: Under which section was it issued?
Answer:
Section 11(1) of CGST Act 5.
Q3: What is profit petroleum?
Answer:
It is the Government’s share of profits from petroleum exploration contracts after cost recovery.
Q4: Is GST applicable on Government’s share of profit petroleum?
Answer:
No, it is exempt under this notification 5.
Q5: Does this exemption apply to crude oil?
Answer:
Yes, it applies to petroleum crude and natural gas exploration 5.
Q6: Is this exemption applicable to private company’s share?
Answer:
No, only Government’s share of profit petroleum is exempt.
Q7: Does this apply to royalty payments?
Answer:
No. This specifically refers to profit petroleum share, not royalty.
Q8: Is GST registration required for exploration companies?
Answer:
Yes, if turnover exceeds threshold.
Apply here:
👉 https://finodha.in/online-gst-registration/
Q9: Should such transactions be reported in GST returns?
Answer:
Yes, exempt supplies must be reported in GSTR-3B.
File returns easily:
👉 https://finodha.in/gst-return-filing/
Q10: Does ITC apply on related expenses?
Answer:
ITC eligibility depends on Section 16 & 17 provisions.
Need GST compliance help?
👉 https://finodha.in/gst-compliance/
Q11: Why is only Government’s share exempt?
Answer:
Because the Government is already receiving revenue under contract; GST would create cascading effect.
Q12: Is this applicable for inter-State supply?
Answer:
This notification specifically mentions intra-State supply 5.
Q13: Does this affect PSC agreements?
Answer:
Yes, it clarifies tax treatment under Production Sharing Contracts.
Q14: Is there any time limit for this exemption?
Answer:
No specific sunset clause mentioned; valid until amended.
Q15: What compliance mistakes should be avoided?
Answer:
❌ Charging GST on Government’s share
❌ Confusing royalty with profit petroleum
❌ Incorrect reporting in returns
✅ Conclusion
Notification No. 05/2018 – Central Tax (Rate) provides GST exemption on Central Government’s share of profit petroleum in petroleum exploration and mining contracts.
Download PDF: Notification No. 05/2018 – Central Tax (Rate)
More Information: https://taxinformation.cbic.gov.in/
Read more interesting articles:
