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Indian Oil and the Odisha government have settled the value-added tax dispute that had overshadowed Paradip refinery’s expansion plans.
In an official statement, Minister of State (Independent Charge) for Petroleum and Natural Gas, Dhramendra Pradhan said, “Both sides have reached an agreement and found an amicable solution for the impasse on the Paradip Refinery issue.”
Odisha will get additional revenue of around Rs 1,500 crore each year from the settlement, he added.
A government official said viability gap funding for the Paradip Refinery project will be revised to Rs 700 crore per annum in the form of interest-free loans for 15 years, starting with the financial year 2016-2017. Repayment will start in the 16th year from each instalment.
The VAT collected and not paid for the years 2015-2016, 2016-2017, 2017-2018 will be deposited by Indian Oil immediately. The Odisha government has agreed to waive the interest/ penalty for VAT withheld by IOCL, the official added.
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