Odisha to review fiscal incentive to IOCL's refinery project

The Odisha government today decided to set up a committee to review fiscal incentives being provided to the IOCL's refinery project at Paradip.
The state government has decided to constitute a working group involving senior officials of the Odisha government and IOCL to lay down a roadmap for establishment of the proposed downstream petro-chemical complex and the role of IOCL as anchor tenant for the PCPIR (Petroleum, Chemical and Petrochemicals Investment Region) at Paradip.
The decision in this regard was taken at a high level meeting chaired by Chief Secretary G C Pati and attended by IOCL Chairman B Ashok.

The need for a review on the agreed fiscal incentive to IOCL's refinery project was felt at the meeting as the state government had signed the MoU with the oil major way back in 2004 for establishment of a 9 MMTPA oil refinery.
Meanwhile, the IOCL has enhanced the capacity of the refinery to 15 MMTPA.
According to the old MoU, IOCL was entitled to get tax exemption on VAT, Entry Tax and Sales Tax. However, the exemption was valid under the condition that the IOCL would go for commercial production of its refinery in 2009-2010.

As the oil major was yet to go for the production, the committee would verify whether the old agreement on tax exemption should be applicable in 2015-16, a finance department official said.

However, the IOCL in the meeting opined that the company should get the tax exemption even as its commissioning had been delayed due to several factors.
The meeting also discussed on the proposed PCPIR project, which was also delayed along with the refinery project.