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India Budget 2008-09 was presented in Parliament by the Finance Minister, Mr P Chidambaram on February 29, 2008. The expectations of the Energy sector were wide sweeping, in the backdrop of growing energy needs of the nation, the recognition that development of infrastructure is of critical importance to deliver sustained economic growth, and the impact of climate change. The tax proposals contain moderate changes to the prevailing fiscal framework; the emphasis is on strengthening the tax administration and tax compliance procedures. Specific to the oil & gas industry, the Finance Bill 2008 introduces sunset to tax holiday to refining, and exclude “petroleum and natural gas” from the definition of mineral oil eligible for the income tax holiday. Service tax on exploration activities continues to be a deterrent. Status quo is maintained in respect of most of the other tax implications prevailing for the energy industry.