Days after the Supreme Court overturned a ruling that allowed Essar Oil to defer payment of sales tax, the Gujarat government has asked the company to repay about Rs 6,300 crore (Rs 63 billion) sales tax plus interest accrued.
The Supreme Court had on January 17 set aside a ruling of the Gujarat high court that allowed Essar Oil the tax benefit. Salex tax due to be paid in installments was about Rs 6,300 crore as of December.
"As announced previously, the company is in discussion with the Gujarat government regarding a repayment schedule and is in the process of filing a petition seeking a review of the decision in the Supreme Court," the statement said.
Essar Oil, which is 87 per cent owned by London-listed Essar Energy Plc, has "already made provision for repaying part of the sales tax deferment liability. This liability has been assigned to a third party."
"As of December 31, 2011, the amount assigned is Rs 1,800 crore (Rs 18 billion). This amount is repayment to Essar Oil to meet any payments of the deferred tax benefit in accordance with the terms of the agreement," the statement added.
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