Even before the completion of the NBCC bid submission process, tax demands from the Income-tax office have played a spoiler in the resolution process of debt-ridden Jaypee Infratech Ltd (JIL). Both Jaypee’s lenders and NBCC are fighting over a waiver of these tax claims.
The firm’s lenders are set to meet on Tuesday to consider the request of state-run NBCC’s request to waive off the firm’s overall tax liability of Rs 40,000 crore. According to officials, the Income Tax department may put forward tax demands aggregating to Rs 33,000 crore over a period of 30 years, treating the transfer of land parcels as revenue subsidy.
As per the CoC’s own admission, the department has already raised claims of Rs 3,334 crore. These tax claims have now become a major point of contention between the lenders and applicant NBCC, since the latter has sought a waiver from these unsettled claims.
While NBCC had maintained that the Rs 33,000 crore-worth claims will be an added burden for the company, making the deal not “financially viable”, lenders of Jaypee Infratech have asked it to withdraw this exemption clause from the revised bid.
According to earlier reports, NBCC has made these claims under the header ‘Reliefs and Concessions’ in the revised bid submitted on April 24. Jaypee Infratech’s interim resolution professional (IRP) Anuj Jain had already pointed out to the lenders that NBCC’s bid was conditional and non-binding. NBCC has stated that the plan proposed by it will not be binding unless key relief measures such as extinguishing of income tax liability and a dispensation from seeking consent of YEIDA for any business transfer is granted, sources had said earlier.
The lenders, on Friday, had written a letter to NBCC seeking clarification on the matter and have requested a reply by May 13 as the lenders’ meet has been fixed for May 14.
The company’s Committee of Creditors had earlier rejected NBCC’s offer citing the lack of necessary clearances. Now that the public sector company has got all the necessary approvals, the CoC is again considering the proposal.