Cuttack: The Odisha government cannot collect VAT from Paradip refinery as was decided in a cabinet meeting on February 23 since the Orissa High Court has stayed the decision of the state government today.
Indian Oil Corporation Limited (IOCL) had moved court on the decision of the state government to cancel the MoU with IOCL signed in 2004 in which a 11 year deferment of VAT on petroleum products from the refinery sold in the state was included. Since the refinery came up six years late, Odisha government has said it incurred losses in terms of deferred taxes repayment by IOCL.
Today a High Court bench has directed the stake holders, namely the state government, IOCL and Oil and Natural Gas department of Union Ministry to form a working committee and come up with a solution in two months time.
Earlier, the state government had said it was losing revenue of about Rs 2000 crore every year owing to the VAT deferment which could add up to Rs 69,000 crore till the deferment ends.