HPL makes presentation to Centre for duty respite

The country's leading petrochemicals company, Haldia Petrochemicals Ltd (HPL), has met Finance Ministry officials to make a presentation on the need for differential duty on naphtha and polymers.

"HPL has made a presentation to the Centre in which Managing Director Partha S Bhattacharyya was also present," official sources told PTI.

HPL's bottomline impact was Rs 300 crore per annum because of the 5 per cent customs duty imposed on its raw material, naphtha, since 2008 and the same duty on polymers.

HPL wanted a duty difference of at least 5 per cent between the raw material, naphtha, and the finished goods, polymers.

"So, government should either remove the duty or increase the import duty on polymers," HPL officials said.

West Bengal Industry Minister Partha Chatterjee has also written to Finance Minister Pranab Mukherjee to look into the situation.Apart from customs duty, HPL was losing close to Rs 300-350 crore a year as it has been classified as an oil company. This led to the denial of sales tax that it was supposed to retain on the sale of motor spirit as incentive.

"HPL has already apprised the industry minister, but expects it will take some more time before the state government restores our benefit by removing the oil company tag. We hope this benefit will be restored after the Centre's financial package for the Bengal government is complete," sources said.HPL has so far been able to get the benefit of Rs 1,700 crore in sales tax remission against its eligibility of Rs 6,250 crore.HPL's financials are bogged down by low sale realisations due to a sharp decline in polymer prices, high costs and debt servicing.