Withdrawal of IOC Paradip refinery’s tax concessions to tap biz sentiment: CII

The Odisha Government has taken the decision to remove the tax concessions to Paradip refinery, which has been set up by Indian Oil Corporation. This will hit the investors' sentiments unfavourably.

Within the two months after giving the first show-cause notice, the state government has informed the company that it is taking back the promised 11-year postponement on the payments of sales tax on Paradip refinery products sold in the state.

This move has been taken to protect Investor perception as it is very important to attract investments. There are many policies having incentives to attract more investments, which in case not fulfilled at the said time may affect business sentiments adversely.

This way, the Odisha Govt has two reasons to withdraw the tax concessions – the project was delayed by almost six years and the size of the refinery has been changed to 15 million tonnes a year from previously agreed 9 mt.

However, IOC has taken the objection for both, saying it had informed the state govt in writing about its plan of constructing a larger refinery together with a petrochemical plant in 2006; and the govt should have removed the concessions in 2009 itself when the refinery started its business.