The petroleum ministry has sought legal advice on payment of production tax by Cairn Energy on the crude oil it plans to produce from Barmer in Rajasthan."Cairn Energy signed a contract for the Rajasthan block that did not specify who (Cairn - the operator of the field or ONGC - the licensee) will pay the statutory levy. Now that is to be settled legally. So, we have sought legal opinion, and are awaiting clarification on theissue," petroleum minister Mani Shankar Aiyar said.Cairn, which plans to produce 80,000-1,00,000 barrels per day from its Mangala and Aishwariya fields in Rajasthan, has protested against the levying of a cess of Rs 900 on every tonne of crude oil produced from the fields.Cairn says the Rajasthan block is a pre-NELP block where ONGC, asthe licensee, was made responsible for payment of all statutory levies like royalty and cess.Petroleum secretary S C Tripathi said that while the production sharing contract (PSC) for the Rajasthan block had clearly mentioned that royalty will be paid by ONGC, it does not mention anything on payment of production cess."Naturally, the cess is to be paid by the producers. Cairn and ONGC are partnering in Mangala and Aishwariya fields, and they will have to pay the cess in proportion of their shareholding," he said.ONGC had, late last month, exercised its "walk-in" rights to take a 30% stake in the two fields.
