The oil and gas industry may not cheer the budget and here’s why. The industry has been demanding that the government consider reducing the minimum alternate tax or MAT rate for exploration and production operations. At close to 20 percent of book profits, it’s a significant deterrent for investment. There have also been calls to clarify the eligibility to avail a tax holiday under Section 80-IB and to include natural gas under the definition of 'mineral oil' . The upstream sector has been making the case for exemption of exploration activity from the levy of GST, as also rationalisation of cess, which currently stands at an ad-valorem rate of 20 percent and eats away a substantial part of the upside at higher crude oil price. However, given the shortfall in GST collections, it seems unlikely the Budget will provide any of these concessions.