Australia has invited Indian companies that are scouting for mines here to join a consultation process to explain its proposed controversial “super profit” tax on domestic mining companies. “Well, we currently are on a consultation process with the mineral and energy industry.Indian companies that are interested, there is a consultation process and they are very welcome to approach the treasury consultation process as well or they need to approach the Minister for Mineral and Resources for information,” the Australian Foreign Minister, Mr Stephen Smith, told newspersons at the sidelines of a India-Australia conference on energy and minerals.
The resource super profit tax is a 40 per cent levy on mining profits, which is in addition to the usual company income-tax and is expected to come into effect from July 1, 2012. Earlier, the NTPC Chairman and Managing Director, Mr R.S. Sharma, said his company was extremely “concerned” about the proposed tax but said that it has no choice but to go ahead with buying stakes in Australian coal mines.
He said he is meeting some of the Government officials here as well as companies tomorrow on this issue. “We hope to get some concessions at least,” he said.
But the Coal Secretary, Mr P. Uma Shankar, said he expected Indian companies to look for opportunities in other countries as well to spread its risks.Online GST Certification Course by TaxGuru & MSME- Click here to Join
“Indian companies just won’t buy only Australian companies but mines in other countries as well,” he pointed out. India expects to bridge the shortfall of about 80 million tonnes of coal through imports.
Mr Smith said the proposed tax will not deter companies from investing into the country, even though there are reports that some of the mining companies have in fact deferred their plans to pump in more funds into their ventures here. “No. Industry will continue to grow in strength to strength.”
“Historically, in Australia, we have seen introduction of changed policy arrangements. I am personally old enough to remember over a period of time where the introduction of new environment regulations were said to be something that would deter investments, where the introduction of the petroleum resources tax were said to deter investments,” Mr Smith added.
He said whenever a new law is proposed, it is followed by public debates and this was one such case. “We have always these robust conversations in Australia when there are suggestions of the new tax. But we are working very carefully with the industry. We want to engage the industry in close consultation process,” he added.
Mr Smith pointed out that there have been a range of policy changes over a decade where “people saw a surge of investments that was transpired when the petroleum resource tax was introduced in the 1970s.”
“People said that there would be a fall in investment resources while in the last six months, we have seen the largest petroleum resources contract through the Gorgon project.”
Mr Smith said with demand from China, India and other countries increasing, the mining industry will continue to grow here. “There will continue to be very strong investment both from domestic but also overseas industries because of the prospects and potential of the industry remains very strong because of growing markets in China, in India and also in Africa (is) very strong indeed.” he said.