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Orissa govt refuses to offer tax sops to IOC

In the continuing stand-off between the Orissa government and the Indian Oil Corporation over the setting up of the Rs 83.12 billion oil refinery at Paradip, the state government on Monday flatly rejected IOC's revised demands for tax concessions.

As per the decision taken at the Empowered Committee of the finance ministers of all states in November 1999 to follow a uniform slab rate of sales tax on 198 items, the Orissa government could not unilaterally grant any concessions on sales tax to any industry, Orissa Finance Minister Ramkrushna Patnaik said.

The Centre had decided to cut down plan assistance to the states that did not adhere to EC's decisions, he said.

Patnaik said IOC also did not satisfy the conditions for availing further tax concessions beyond what had been agreed to by the Orissa government.

While describing as threatening IOC chairman M A Pathan's recent statement to put on hold the work on the 9 million tonne refinery unless the state government extended an 11-year Orissa sales tax exemption, the finance minister questioned his locus standi to talk about policy matters of the government.

At the same time, Patnaik said the state chief secretary and the principal secretary, finance department, would have a dialogue with the IOC chief and officers of the finance and petroleum ministries at Delhi on Wednesday. If necessary, he would take up the matter with the Prime Minister Atal Bihari Vajpayee who laid the foundation stone of the proposed refinery in August 2000 and the Union Petroleum Minister Ram Naik, he said.

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