In the resolution of the issue of VAT deferment for Indian Oil Corporation’s (IOCL) Paradip refinery in Odisha, IOCL has made VAT payment of Rs 2,935 crore to Odisha government. The refinery had commenced commercial operations in November 2015.

The recent meeting between Odisha Chief Minister and union minister for petroleum & natural gas helped resolve the pending issue, IOCL stated. Odisha government agreed to extend the deferment of VAT on products produced by Paradip refinery.

Based on the follow-up discussions held in the joint working group comprising officials of petroleum ministry, Indian Oil and Odisha government, it was agreed that Odisha will henceforth receive regular VAT/GST revenue from Indian Oil, out of which Rs 700 crore per annum will be given as interest-free loan to Indian Oil for 15 years.

Indian Oil’s investment of over Rs 40,000 crore in Paradip refinery is the single largest investment by a corporate in Odisha. Further investments are in the offing, including expansion of refining capacity and downstream petrochemical options like polypropylene, mono ethylene glycol, paraxylene, petcoke gasification which will go a long way in the development of Odisha as a petrochemicals hub.