One of the conditions for availing the benefit under section 35AD in the case of laying and operating a cross-country natural gas or crude or petroleum oil pipeline network for distribution, including storage facilities being an integral part of such network, is that the specified business ‘has made not less than one-third of its total pipeline capacity available for use on common carrier basis by any person other than the assessee or an associated person’. The Petroleum & Natural Gas Regulatory Board has, by regulations, specified a common carrier capacity condition of ‘one-third’ for a natural gas pipeline network and ‘one-fourth’ for petroleum product pipeline network. In order to rationalise the existing condition regarding common carrier capacity, it is proposed to amend sub-section (2) of section 35AD to provide that the proportion of the total pipeline capacity to be made available for use on common carrier basis should be as specified by the said regulations.

This amendment is proposed to take effect retrospectively from 1st April, 2010 and will, accordingly, apply in relation to the assessment year 2010-11 and subsequent years.


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