State-owned Indian Oil Corporation (IOC) will invest about Rs 52,000 crore in expanding Paradip refinery in Odisha and setting up petrochemical complex after the Odisha State Gvernment agreed to restore part of tax incentives.
- In February 2017, Odisha State Government withdrew 11-year VAT or sales tax deferment on Paradip refinery products sold in the state by IOC.
- Now, Odisha Government has agreed to restore part of tax incentives and has agreed to give Rs 700 crore per annum of an interest-free loan for 15 years to make up for the withdrawn incentive.
- Odisha State Government has also agreed to waive interest/penalty for the VAT withheld by IOC.
Highlights of the revised agreement between IOC and Odisha State Government:
- IOC wanted Rs 1,000 crore per annum of an interest-free loan but in the end settled for Rs 700 crore loan over a longer 15-year period.
- 700 crore interest-free loan for 15 years is equal to the tax incentives Rajasthan has recently extended for setting up of a refinery in Barmer by HPCL. It is also similar to the tax breaks given by Punjab for Bhatinda refinery and Madhya Pradesh for the Bina unit.
- Now as the deal has been finalised, IOC will go full stream with the expansion of Paradip refinery capacity by 5 million tons a year as well as set up a polypropylene plant and a mono-ethylene glycol production facility in 4-5 years.
- IOC will also withdraw a legal challenge moved at the Odisha High Court against the State Government’s decision to withdraw signed commitment.
Quick Facts about Indian Oil Corp (IOC):
- IOC is a public sector petrochemical
- It was founded in year 1959.
- Headquarters of IOC is located in New Delhi.
- Sanjiv Singh is the current Chairman of IOC.