BHUBANESWAR: Justifying the State Government's decision to stop fiscal incentives to Indian Oil Corporation Limited's (IOCL) refinery at Paradip, BJD on Sunday said there is no need for deferment of VAT for 11 years when the Corporation has earned profit of `15,800 crore in 2016.
Stating that there was delay of nearly seven years in commissioning of the Paradip oil refinery, BJD spokesperson Pratap Keshari Deb told mediapersons that because of the delay, the interest free loan in the shape of deferment of VAT will be 69,892 crore. The loss to the State exchequer at present value will be `22,745 crore, he said and added that at the time of signing of the MoU between Odisha Government and IOCL, the interest free loan was calculated at `9783 crore. In that case, the loss to the State exchequer would have been `4412 crore, he said.
Deb said the Sanjeev Hota Committee in its report in 2011 and the State's Advocate General had also maintained that the Odisha would incur losses because of VAT deferment to IOCL for setting up the oil refinery.
The State Government was forced to reconsider the MoU under these circumstances and the Cabinet decided at its meeting on December 20, 2016 to withdraw fiscal incentive in the shape of VAT deferment for 11 years. The State Government issued a showcause notice to IOCL on December 29, 2016 and after considering the reply, decided to withdraw VAT deferment to the refinery on February 22, 2017.