A day after Chief Minister Naveen Patnaik and Union Minister of Petroleum and Natural Gas Dharmendra Pradhan discussed the contentious issue of deferment of VAT on products of the Indian Oil Corporation limited's (IOCl) Paradip Refinery on Friday in New Delhi, the dispute was resolved on a mutual basis on Saturday.
Pradhan addressing a Press conference in Delhi said a consensus has been reached between both the parties with Odisha Government agreeing to provide Rs 700 crore of interest-free loan per annum to the IOCl for a period of 15 years taking into account the 2016-17 last financial quarter.
As per the new MoU, the IOCl would start repayment from the 16th year onwards. Out of the estimated tax collection of Rs 2,200 crore by the IOCl, Odisha would get nearly Rs 1,500 crore after giving a Rs 700-crore loan.
"It is agreed that the Odisha Government will give interest-free loan of Rs 700 crore for 15 years and allow total deferment of VAT. This would give a substantial amount of additional revenue of Rs 1500 crore per year to Odisha," said Pradhan.
Earlier, there was a dispute between both parties over VGF and deferment of VAT allowed to the IOCl for VAT deferment to the Paradip Refinery for 11 years in 2004.
Pradhan further informed that the present development assumes significance as it would be in Odisha's interest keeping in view the proposed Rs 50,000-crore investment plans of the IOCl in the State.
Further investments are in the offing, including expansion of refining capacity and downstream petrochemical options like polypropylene, mono ethylene glycol, paraxylene and petcoke gasification, which would go a long way in the development of Odisha as a petrochemicals hub, he said.
The investments would be a boost to industrialisation as several downstream and ancillary units would come up and create job opportunities for the people of the State, he added.