BHUBANESWAR: The Expert Committee on Revenue Enhancing Measures has disapproved of the tax concessions given to Indian Oil Corporation (IOC) for establishment of the refinery at Paradip. As per the terms of the agreement, the company will be allowed to collect value added tax (VAT) from petroleum products after commissioning of the refinery at Paradip and retain the amount. The collected amount so retained will be passed onto the State Government after a period of 11 years. The commissioning of the refinery at Paradip is likely to take place in 2013-14. Collection of VAT from IOC during 2010-11 was ` 903.52 crore. The average growth in collection of VAT from IOC during the last three years is 20.11 per cent. “If we apply a growth rate of 20 per cent, the VAT collection due from IOC in 2023-24 may go up to ` 9,667.05 crore,” the committee said. Projections on this basis show that the cumulative impact on collection VAT from petroleum products after commissioning of the refinery at Paradip during the period 2013-24 may be of the order of ` 50,195.89 crore. This will create a big dent in State’s resources, especially because the massive expansion of the capacity of IOC could also displace other retailers of petro-goods who pay taxes, the committee added.
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