Under the existing provisions, a business of laying and operating a cross-country natural gas is eligible for deduction u/s. 35AD only if it makes available not less than 1/3rd of its total pipeline capacity for use on common carrier basis by any other person other than the assessee or an associated person of such assessee. The Finance Bill, 2010 proposes that the assessee is required to make available such proportion of its total pipeline capacity as specified by regulations made by the Petroleum and Natural Gas Regulatory Board established under Section 3(1) of the Petroleum and Natural Gas Regulatory Board Act, 2006 instead of 1/3rd of its total pipeline capacity. It may be mentioned that the concerned authority has provided in its regulation that gas pipeline network should have 1/3rd of the common carrier capacity, whereas petroleum pipeline network should have 1/4th common carrier capacity.

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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