Bhubaneswar: The Odisha government today said a committee has been set up under the Chairmanship of the Secretary of Petroleum and Natural Gas Ministry to review the state's agreement with Indian Oil Corporation (IOC).
The government estimated a revenue loss of Rs 2,173 crore during 2016-17 due to VAT exemption to the refinery project at Paradip.
"It is a fact that the state government in 2004 had agreed to exempt tax on oil to be produced at the refinery project. However, a committee has been set up under the Chairmanship of the PNG secretary to review the agreement," Odisha Finance Minister Pradip Kumar Amat said in the Assembly while replying to a question.
Stating that the state government has already lost the revenue to the tune of Rs 475 crore towards entry tax and VAT to the refinery project, Amat said the state would incur a heavy revenue loss as per the agreement with the IOCL.
This apart, the finance minister said, the IOCL would retain Rs 69,892 crore collected as Sales Tax/VAT on sale of products at the Paradip Refinery, for 11 years.
"The IOCL will, however, return this amount (Rs 69,892 crore) to the state government after 11 years from 2016-17 without paying any interest on the amount," Amat said.
Therefore, Amat said the state would lose the revenue of about Rs 24,333 crore as rebate on the Net Present Value for establishment of the refinery project in Odisha.
As the agreement between the state government and the IOCL has the provision of exemption of central sales tax over the Refinery project for 30 years, Amat said the state was estimated to lose an estimated Rs 1,000 crore in 2016-17.
Similarly, the state will incur a revenue loss of Rs 197 crore in 2016-17 over exemption of entry tax on crude oil, Amat informed the assembly.