The five-member core group of secretaries, set up to draft a report on the LNG sector, will shortly recommend implementation of these suggestions to the committee of secretaries.

Top government sources told The Financial Express that the group has also accepted power ministry's proposal to bring at par the import duties on integrated and stand-alone regassification of LNG projects.

The rationalisation of the import duties on LNG would be done at a single value irrespective of its end use.

However, the core group has not taken any view on the power ministry's proposal to extend benefits of section 10 (23 G) of the Income Tax Act and the tax holiday benefit to LNG projects.

Presently, the import duty on LNG for usage in power generation stands at 9 per cent whereas that for other commercial use, it is 22 per cent. The power industry had recommended rationalisation of this import duty at a single value. The industry has been demanding cut in import duty on LNG in the range of 5-10 per cent.

Sources said that granting infrastructure status to LNG projects would help in easy funding of these projects by various banks and financial institutions.

For financing projects with infrastructure status, the funding agencies have a different set of guidelines as against those for other projects. Core group of secretaries recommends infrastructure status to LNG projectsClassification of LNG projects as infrastructure projects would facilitate funding for these projects, sources said.

Earlier, the core group of secretaries had also favoured free-on-board (FOB) policy for LNG imports into the country in a bid to provide an extra push for the domestic shipping companies.

The core group is of the view that LNG contracts must be done on FOB-basis, wherein the responsibility for making the transportation arrangements lies with the importer (purchaser).

According to sources, all those private companies that have negotiated with LNG suppliers on CIF basis would now have to fall in line with the FOB policy recommended by the core group. Under CIF, contracts, the responsibility for shipping the cargo rests with the supplier (exporter).

By making FOB imports mandatory for LNG imports, the government hopes to assist the domestic shipping companies gain entry into the highly capital-intensive and lucrative LNG shipping sector through joint ventures with foreign shipping lines.

The core group of secretaries includes secretaries of various ministries including shipping, finance, power and fertilizers, with the secretary, petroleum, as the convenor. This group has deliberated on various issues relating to the LNG industry and will now make recommendations to the committee of secretaries.

The group of secretaries was set up at a meeting of the Committee of Secretaries (CoS) headed by the Cabinet Secretary, Prabhat Kumar, on March 24 while considering the draft LNG transportation policy piloted by the department of shipping in the ministry of surface transport.