New Delhi, August 19: Orissa government and the Indian Oil Corporation Ltd (IOCL) have agreed to put an end to the ongoing standoff relating to revenues from the Paradip refinery unit.
The state government, which had withdrawn tax incentives to the Rs 34,555-crore Paradip refinery, has agreed to restore some of the tax breaks including a Rs 700-crore per annum of interest-free loan, Oil Minister Dharmendra Pradhan told reporters here.
The breakthrough came after the Union minister of state met Orissa Chief Minister Naveen Patnaik at Orissa Bhavan here Friday.
‘‘It has been decided that the viability gap funding will be revised to Rs 700 crore per annum in four equal installments in each quarter in the form of interest-free loans starting from 2016-17 fiscal,” Pradhan said.
Indian Oil Corp (IOC) and the state government agreed to the revised terms at the meeting. The State government had written to IOC February 22 saying it is withdrawing the promised 11-year deferment on payment of sales tax on Paradip refinery products sold in the state.
The company dragged the state government to court for walking back on its commitment and has not paid VAT on products sold in the state since commissioning of the refinery last year. The agreement on interest-free loan for 15 years would give additional revenue to the state, Pradhan said.
The minister also said “The Value Added Tax (VAT) not paid for 2015, 2016 and 2017 would be deposited by IOCL immediately while the Orissa government would ensure interest-free loans to IOCL for 2016-17 and for three quarters of 2017-18 by December 2017/January 2018 and every quarter thereafter.” Sources said the state government has also agreed to waive interest/penalty for the VAT withheld by IOC. A joint petition will be filed in the Orissa High Court, Cuttack informing about the agreement, they said. PNN
State to restore tax sops for Paradip IOCL
