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Jun 15, 2012, 12.02 PM IST
The Indian government formally lifted a hefty tax on payments to National Iranian Oil Co (NIOC) for settling part of its oil purchases in Indian rupees, two sources at Indian refiners said.
India's finance minister in March proposed to exempt oil payments to Iran in rupees from a 40% tax in order to smooth payments which have been hit by western sanctions against Tehran's disputed nuclear programme. India and Iran in January agreed to settle 45% of oil trade in rupees, which are not freely traded on international markets. Iran planned to use rupees to pay for imports from India but refiners were unwilling to make payments while the tax was in place. "I have just received the notification ... At this moment I can't say whether we will start paying tomorrow or next week," said a source at Hindustan Petroleum Corp . The second source said: "There are certain terms that we have to fulfill then we can start making rupee payment."
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