Bhubaneswar: The State Cabinet is all set to hold its meeting on 5th September to finalize the amount of tax to be exempted to Indian Oil Corporation Limited (IOCL)’s Paradip oil refinery. Even as the tussle between the state government and IOCL ended up recently after a meeting between Chief Minister Naveen Patnaik and Union Petroleum Minister Dharmendra Pradhan at New Delhi, the State Cabinet is up to take the final call over exemption of tax to IOCL.
It was agreed that the state government, which had earlier demanded Rs 2,745 crore as VAT exemption, will extend interest-free loan to the IOCL, known as viability gap fund, of Rs 700 crore per annum for the next 15 years from the financial year 2016-17.
This will be given in four equal instalments in each quarter in the form of interest free loan. The IOCL will repay the loan amount from the 16th year.
On the other hand, the Odisha government will get adequate tax share from the IOCL every year.
“In 2016-17, out of the IOCL’s tax collection of Rs 2,200 crore, the state will get Rs 1,500 crore. The state’s share of tax will increase as the IOCL’s revenue base increases over the years. If the ongoing trend continues, the state government can get tax to tune to Rs 2,200 crore to Rs 2,500 per annum,” said Pradhan, briefing newspersons on the details of the agreement.
The agreement stipulated that VAT collected and not paid for the years 2015-16, 2016-17 and 2017-18 will be paid by the IOCL to the state government and Odisha has agreed to waive interest and penalty imposed on the corporation.
In the wake of the meeting between Naveen and Pradhan, officials of the state government, central government and the IOCL met today to sort out the differences. It was agreed that the two sides would file a joint petition in Orissa High Court and inform it about the new agreement.