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Working Group meeting on IOCL refinery VAT row remains inconclusive

 The Core group meeting to resolve the VAT deferment row between the State government and Indian Oil Corporation Limited at New Delhi remained inconclusive today.

The fourth meeting of the working group involving officials of Indian Oil Corporation Limited (IOCL) and Odisha government failed to arrive at any conclusion, sources said.

Notably, a meeting conducted in this regard on April 24 in New Delhi had also ended without any result.

Chief Secretary AP Padhi who led a delegation of State government officials told reporters there that no decision could be taken at the meeting though both sides exchanged documents in support of their claims. He said, the Orissa High Court shall be approached to seek more time for resolution of the issue mutually.

Padhi added, another meeting may be held this month to resolve the issue.

Notably, the State government has slapped a demand notice to the oil major for Rs.1,485 crore payable as Value Added Tax (VAT). Three meetings of the working group have already been held to resolve the dispute without any breakthrough so far though Petroleum and Natural Gas Minister Dharmendra Pradhan hopes that a solution can be found through discussion in the working group.

Notably, a deadlock continues between the State Government and IOCL over award of fiscal incentives to the oil major for its 15 million ton crude oil refinery at Paradip.

The memorandum of understanding (MoU) signed in 2004 between the State Government and IOCL for a 9 million ton refinery project had stipulated five years time for completion of the project.

But, the Greenfield project was completed nearly after seven years in 2015, for which State government has held the IOCL as responsible for violation of MoU conditions. The agreement offered interest-free credit for 11 years to the IOCL to ensure viability of the 9 MTPA project which was later ramped up to 15 MTPA.

In February, State Cabinet had approved a proposal to withdraw the interest-free credit incentive, which is equal to the VAT, for 11 years given to IOCL and issued a demand notice to the oil major for Rs.1,485 crore payable as Value Added Tax (VAT).

IOCL contested it in Orissa High Court and the Court kept in abeyance the demand notice while directing for the constitution of a Working Group headed by the Union MoPNG Secretary to settle the issue within two months.

The Union Government had expressed its willingness to discuss the issue as it contended that the present government was not responsible for the delay in completion of the project. This will be the third meeting of the Working Group (WG) the last two being held on April 28 and July 28 last year. According to official sources, the issue is needed to be sorted out as early as possible in the interest of both the State Government and IOCL. 


Précis 2017
From asking his party men to ‘live a simple life and serve the people’ to taunting the BJP for its ‘crocodile tears’, Chief Minister and BJD supremo Naveen Patnaik has not only become politically invincible, he seems to be so in the coming years too.


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