New Delhi: The meeting between Chief Minister Naveen Patnaik and Union Petroleum and Natural Gas Minister Dharmendra Pradhan for an amicable settlement of the present tax-dispute between Indian Oil Corporation Limited (IOCL) and Government of Odisha at Odisha Bhawan here on Friday ended in a positive note.
Talking to media after the meeting, Naveen said, “We discussed ways to resolve the IOCL issue and are hopeful of an amicable and positive solution.”
Dharmendra was of the view that though Odisha had extended the tax concession in 2004, there was a need to find an amicable solution to the present impasse keeping in view the fiscal health of the state and commercial interest of IOCL. He stressed the need for finding a middle path, wherein both IOCL and the state government can work out a mutual acceptable solution by climbing down from their stated positions.
Expressing hope, Dharmendra said, “We will work out a solution which will be profitable to both the Odisha government and the IOCL,” adding that interest of the people of the state will be safeguarded.
The Secretary, Ministry of Petroleum and Natural Gas, the Chairman, IOCL, The Chief Secretary, Government of Odisha and the Development Commissioner, Odisha, were also present in the meeting.
According to reports, the Odisha government and IOCL had signed an MoU on February 16, 2004, for setting up an oil refinery at Paradip. One of the clauses in the agreement was that payment of the value added tax (VAT) on sale of products of Paradip oil refinery will be deferred until the refinery earns profit. Since the refinery has started making profits, the state government now demands Rs 2,745 crore per annum towards VAT to its state coffers.
The IOCL, however, is opposing it.
Both have now taken legal recourse and the case is pending with the Orissa High Court. Earlier, the court had asked both parties to arrive at an amicable solution within two months.
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