Paradip Refinery row: IOCL-Odisha govt meeting ends inconclusive

Odisha Sun Times Bureau
New Delhi, May 5:

Yet again the working group meeting held here at the Petroleum Ministry to sort out the dispute between Odisha government and Indian Oil Corporation Ltd (IOCL)’s Paradip Refinery remained inconclusive failing to arrive at a decision.

“At this meeting too, we couldn’t arrive at any decision. We exchanged facts. We will seek more time from the High Court for mutual settlement. The High Court had earlier given two months time to settle the issue. Negotiations are on. We are likely to meet again by the end of this month,” informed Odisha Chief Secretary A P Padhi briefing newsmen after the working group meeting.

This was the fourth meeting of the working group which was attended by Odisha Chief Secretary, Finance Secretary and senior officials of IOCL.

It may be noted here that IOCL’s  Paradip Refinery had moved the High Court against Odisha government’s demand note of Rs 1485 crore on it towards pending taxes.

The High Court on March 16 had asked the state government to keep its demand in abeyance and resolve the issue through a working group comprising of officials of IOCL, Petroleum and Natural Gas Ministry and state government within two months.

It’s worth mentioning here that the state government and IOCL had inked a memorandum of understanding (MoU) for the establishment of Paradip Refinery on February 16 in 2004.

According to the MoU, the state government had agreed for VAT deferment for 11 years on IOCL’s products sold inside the state from the date of commencement of commercial operations of the refinery.

Further, as per the agreement, IOCL would start repayment of the VAT from the 12thyear from the date of commencement of commercial operations of the refinery albeit without interest. This would be considered as an interest-free loan to IOCL.

The tax concession was extended to IOCL considering its operational viability, local employment, and the region’s economic growth.

IOCL had collected Rs 1,485 crore towards VAT from sales in Odisha since its launching of commercial operations till the end of December last year.

The state government on February 27 last served a demand note of Rs 1485 crore on IOCL towards pending VAT citing breach of the agreement.


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