New Delhi: The meeting of Chief Minister Naveen Patnaik with Union Minister of State for Petroleum and Natural Gas Dharmendra Pradhan Friday ended with both expressing hope about breaking the deadlock over issues of tax incentives for Indian Oil Corporation’s (IOC) Paradip refinery.
The deadlock arose after the state government had last year withdrawn tax incentives to the 15-million tonne refinery, a decision that IOC has challenged in court.
The MoU between the state government and IOC in 2004 read that the refinery would start paying Value Added Tax on sale of its products after it starts earning profits.
Although the refinery had collected VAT by selling its products in the state till December 2016 after it started production September 22, 2015, did not remit VAT to the state in keeping with the agreement. The state issued a demand note for `2,745 crore to IOC February 27 and directed that it pay its dues. IOC, though, has not complied with the state’s demand and has been opposing the state’s demand. The state is also questioning the IOC’s decision to increase its plant capacity from nine million tonnes to 15 million tonne without informing it.
The Chief Minister said after the meeting, which also involved senior bureaucrats, that he was “hopeful of a positive result after the meeting”. Pradhan, in turn, expressed willingness to relook at the causes of deadlock over the IOC issue and to rework on problem areas. “We want to secure the rights of people of Orissa, for which decisions could be reconsidered. I believe we will soon be able to amicably arrive at a solution and resolve the deadlock by taking the middle path. Negotiations have just started and it is likely to we will find a way soon,” Pradhan told reporters here.
The minister added: “The meeting was meant to discuss how the state could benefit while IOCL also does not suffer. [The Chief Minister] is cooperating. I hope his officials will also cooperate. I have instructed my colleagues in the ministry and the IOCL to cooperate with the state government.”
Pradhan said it was important for Orissa to incentivise expansion plans of IOCL to create petrochemical and downstream industries in the state. “Over time, it will enable the state to increase revenue and also create additional employment avenues for youth of the state,” a release from the petroleum ministry Friday stated.
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