Fearing national loss of revenue due to tax concessions given to Paradip refinery of Indian Oil Corporation (IOCL), the Odisha Government has sought review of the MoU with the company.
The matter was also raised during a recent meeting of Union Minister for petroleum and natural gas Dharmendra Pradhan with CM Naveen Patnaik.
The state fears the project will knock off Rs.2,000 crore per annum from its basket of sales tax collection on petroleum products. This is because Odisha had agreed to defer collection of sales tax on the products of the Paradip refinery for eleven years from the date of commissioning of the project when it signed the MoU with IOCL in February, 2004.
The state government now seeks review of the MoU on the ground that the proposed capacity of the refinery at the time of signing the agreement was pegged at 9 MnT per annum. But it has subsequently been increased to 15 MnT.
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