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Withdrawal of refinery tax sops to hit State economy: Pradhan

Union Minister of State for Petroleum and Natural Gas Dharmendra Pradhan on Sunday appealed to Chief Minister Naveen Patnaik to reconsider the State Government’s decision to withdraw tax incentives to

Published: 27th February 2017 03:15 AM  |   Last Updated: 27th February 2017 07:39 AM   |  A+A-

Minister of State, Petroleum and Natural Gas, Dharmendra Pradhan | PTI

By Express News Service

BHUBANESWAR: Union Minister of State for Petroleum and Natural Gas Dharmendra Pradhan on Sunday appealed to Chief Minister Naveen Patnaik to reconsider the State Government’s decision to withdraw tax incentives to the mega oil refinery project of the Indian Oil Corporation (IOC) at Paradip in Jagatsinghpur district.

The withdrawal of fiscal incentives like 11-year deferment of VAT on petroleum products from the refinery sold in Odisha will adversely hit the State’s economy and send a wrong signal to the corporate world as well, Pradhan told reporters here.
Expressing his readiness to renegotiate on the vexed issue of tax deferment, the Petroleum Minister said the State Government has never taken up the matter with the Centre before deciding to withdraw the fiscal incentives to IOCL.

The Chief Minister, who is writing so frequently to Prime Minister on sundry issues, could have done so before taking such an important decision, he said. “Irrespective of our political differences, I request the Chief Minister to reconsider the tax sops withdrawal decision,” he said.

Responding to the State Government charge that the refinery project was delayed by six years resulting in revenue loss of about `2000 crore per annum, Pradhan said the NDA Government was in no way responsible for it.

The project was delayed due to several factors like delay in land acquisition and law and order issues which were State subjects. IOCL has nothing to do with such problems. The State Government is trying to cover up its deficiencies by shifting the blame to the national oil major, he said.

Rubbishing Finance Minister Pradip Amat’s allegation that IOCL took unilateral decision to enhance the capacity of the oil refinery from 9 million tonne to 15 million tonne, Pradhan referred to a letter written by then IOCL Director (Refinery) Jaspal Singh in 2009 to the then Chief Secretary Subash Pani indicating the decision taken by the Board of Directors of the national PSU.

The Union Minister strongly refuted the State Government allegation that IOCL is not sharing the financial viability report of the project after its capacity was increased. He said some anti-Odisha bureaucrats are trying to cause harm to the State by misleading the Government.

With another Rs 75,000 crore investment in pipeline for the proposed petrochemical complex, Pradhan feared that the expansion plan may be derailed if the State Government remains adamant on its decision. On the State Government view that the refinery no longer needs incentives as its profitability had increased due to a higher capacity and low global oil prices, he said Paradip refinery is yet to achieve profitability on a standalone basis.



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