Talks with IOCL remain inconclusive till more discussions

Bhubaneswar: The much awaited talks between the Indian Oil Corporation Limited (IOCL) and Odisha government, to resolve the VAT issue, reportedly failed to reach a consensus in New Delhi on Monday, as the officials attending the meeting sought more time to discuss on it.
“No decision could be taken at the meeting. We discussed on the information which will be needed for the next meeting,” Odisha chief secretary AP Padhi told reporters after the discussion.
“Officials of both IOCL and Odisha government will discuss  another day to sort out the matter,” he added.
Earlier this month, Union Petroleum minister Dharmendra Pradhan had said he had directed the officials of the ministry and IOCL to go for fresh talks without incurring any business loss.
“The present government at the Centre is not responsible for the delay in setting up of the project (of IOCL). The expansion of the refinery’s capacity from nine million tonnes to 15 million tonnes is good for the people of the state. If the Odisha government feels that there should be more financial support from the Centre to minimise the state’s burden, we are ready for a fresh negotiation”, Pradhan said.
In February, Odisha’s cabinet had approved a proposal to withdraw an incentive of interest-free credit, which is equal to the sales tax, for 11 years given to IOCL. The agreement for interest-free credit for 11 years to the refinery project was offered to the IOCL refinery as per an agreement signed in 2004 to ensure the project’s viability given its original rated capacity of nine million tonne per annum (mtpa). Later, IOCL revved up the refinery’s capacity to 15 mtpa. The State government felt with the expanded capacity, IOCL was capable of maintaining viability and this obviated the need for deferment in value added tax (VAT). Also, the state government flagged its contention that the refinery project was delayed.
Accordingly, the State government had issued a demand notice worth Rs 1,485 crore payable as VAT by IOCL on February 27. IOCL contested the State government’s notice in the Orissa High Court.
In a setback to the State government, the HC ordered to keep the demand notice in abeyance served to the oil marketing company, seeking payment of Rs 1,485 crore pending as VAT.
Also the court had directed the working group comprising secretary of Ministry of Petroleum and Natural Gas, officials of IOCL and the Odisha government to look into the grievances of the state and complete the exercise in two months.