No justification to allow tax sops to Paradip refinery: Odisha finance minister


No justification to allow tax sops to Paradip refinery: Odisha finance minister

Summary: BHUBANESWAR: A day after the state cabinet decided not to allow financial sops to IOCL ‘s 15 MMTPA Paradip refinery , finance minister Pradip Kumar Amat justified the move in the assembly on Thursday. But IOCL has unilaterally enhanced its capacity to 15 MMTPA,” Amat said. The state exchequer would bear a net loss of Rs 22745 crore if the tax sops are allowed to the refinery. “The state government, according to the MoU, had agreed to extend financial benefit for a 9 MMTPA refinery. “The state government earns one-fourth of its total commercial tax from petroleum products.” There is no logic behind allowing a profit making company to enjoy financial benefits.

BHUBANESWAR: A day after the state cabinet decided not to allow financial sops to IOCL ‘s 15 MMTPA Paradip refinery, finance minister Pradip Kumar Amat justified the move in the assembly on Thursday.”There is no logic behind allowing a profit making company to enjoy financial benefits. Extension of financial benefit to the plant would have a negative impact on state’s economy,” Amat said in the state assembly.The state government while signing the MoU with IOCL in February 2004 promised to extend fiscal incentive in the shape of interest-free loan equivalent to sales tax on the finishing products of the refinery for 11 years from the date of commissioning of the plant.The finance minister also said that the central PSU has delayed in commissioning the project as it was scheduled to be completed by 2009 according to the MoU. “The state government, according to the MoU, had agreed to extend financial benefit for a 9 MMTPA refinery.

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But IOCL has unilaterally enhanced its capacity to 15 MMTPA,” Amat said.The state exchequer would bear a net loss of Rs 22745 crore if the tax sops are allowed to the refinery. “The state government earns one-fourth of its total commercial tax from petroleum products. If the state government would lose it, it would be difficult to take up different pro-people programmes,” Amat said.On the basis of the cabinet decision, the state finance department has again asked the IOCL to deposit commercial tax worth Rs 215 crore for 2015-16 and Rs 1,270 crore for 2016-17 (up to December, 2016).Amat also said that the state government has already extended a series of sops to the central PSU during its construction that included exemption Rs 570 crore VAT on works contract, waiver of entry tax on machinery and equipment imported for the plant, exemption of royalty on sand and similar products and electricity duty for 5 years..  Read more..

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