The Working Committee meeting held between the Odisha Government and the Indian Oil Corporation (IOCl) in New Delhi on Monday to resolve the Paradip Refinery VAT waiver dispute remained inconclusive.
“We discussed with IOCl officials on the State’s decision to stop providing fiscal incentive to the IOCl Refinery project at Paradip in view of its expansion to 15-million tonne per annum capacity over agreement. A conclusive decision couldn’t be reached. The issue will be discussed again at a meeting to be held in the coming month,” Chief Secretary AP Padhi told reporters after attending the meeting presided over by Petroleum and Natural Gas Secretary Kapil Dev Tripathy.
Padhi, Development Commissioner R Balakrishnan, Finance Principal Secretary Tuhin Kanta Pandey and Special Secretary Ashok Kumar Meena attended the meeting on behalf of the State Government.
Notably, deadlock continues between the State Government and the IOCl over award of fiscal incentives through waiver of VAT to the Paradi Refinery after the project was expanded to 15 million tonne over conditions of the MoU.
According to the MoU signed in 2004, the 9-MT Refinery project was to be completed in five years. As it was commissioned in 2015, State Government argues that the IOCl violated MoU conditions.
As per the agreement, the State Government had to provide interest-free credit for 11 years to the 9-MTPA project. However, the IOCl ramped up the Refinery’s capacity to 15 MTPA.
In February, the State Cabinet had approved a proposal to withdraw an incentive of interest-free credit, which is equal to the VAT, for 11 years given to the IOCl.
Meanwhile, PNG Minister Dharmendra Pradhan said the issue should be discussed and resolved in the
working group meeting instead of going to the Supreme Court.