Naveen – Dharmendra talk leaves hope for an amicable solution to the IOCL tax dispute

Utkal Reporter Bureau| August 18, 2017
Odisha CM Naveen Pattnaik and Union Petroleum and Natural Gas Minister Dharmendra Pradhan held a talk today in New Delhi on the issue of tax dispute between the government of Odisha and Indian Oil Corp. Ltd. over the Paradip refinery.
The meeting between the two heads of the concerned parties leaves hope for an amicable solution to the dispute if both the leaders can be believed to be honest on what tthey said after the meeting.

 

Not withstanding the ongoing friction betwwwen BJD and BJP on the political turf of Odisha both Naveen Pattnaik and Dharmendra Pradhan had shown flexibility on their respective stand over the issue.
CM Naveen Pattnaik after the meeting said,” We have discussed the way to find out a solution to the IOCL problem and we hope we will come to an amicable solution with IOCL, as per as the state government is concerned.”
Similarly Petroleum Minister Dharmendra Pradhan hinted to favor any change in the MOU in question to see that no party suffer loss. He said”The main challenge is to find out a way where state can be benefitted and IOCL should not be suffered in a major way” He however was hopeful of a positive outcome from the meeting.
Revenue and employment of the state is paramount, added Mr. Pradhan who is seen as the CM face of BJP in Odisha.
IOCL and Odisha government have been engaged in a conflict for the last six months over the claim of VAT on the sale of products from the IOCL’s Paradip refinery. The case is now landed in the Odisha High Court. Two rounds of talk between the authorities of the concerned parties on the direction of the High Court have already failed before this summit level meeting on August 18.
The oil refinery of IOCL in Paradip has come up on the basis of an MOU signed in 2004 between IOCL and the government of Odisha. The refinery started production in September 2016. The understanding grants IOCL to pay the VAT on the products from the refinery after 11 years which attracted controversy after the Odisha government demanded Rs 1485 cr in February 2017 towards VAT on the products of the Paradip refinery during the period of September and December 2016.
IOCL has moved to Odisha High Court challenging the state government’s demand on the basis of the MOU signed in 2004 while the government of Odisha cites the delay of production and the arbitrary expansion of the refinary as their justifiable reason behind its demand on the VAT.