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(Plastemart) -- Haldia
Petrochemicals, a joint venture of The Chattterjee Group (TCG) and West Bengal
government, has started talks with the state government on de-notifying HPL as
an oil company, which has resulted in an annual loss of Rs 300 crore since 2006.
The company is also lobbying with the Union government for zero duty on naphtha
imports, while also waiting for the Supreme Court (SC) verdict on the ownership
issue, as per Financial Express.
HPL Managing Director Partha S Bhattacharyya said HPL under the West
Bengal incentive scheme of 1996 was supposed to get tax exemption accumulating
up to R6.000 crore or for a period of 12 years, whichever was earlier. But the
government in 2006 withdrew the sales tax exemption on motor spirit (MS) issuing
a sales tax notification, that HPL was treated as an oil company since it was
producing MS oil, which was a petroleum product and not petrochemical product.
But HPL did not sell MS oil to the open market and supplied it only to oil
companies, which were sales tax negative. Therefore, an additional burden of Rs
300 crore came on it. The Centre in 2008 imposed 5% duty on naphtha imports,
while continuing with the 5% duty on the exports of naphtha products. This
brought down the duty differentiation to zero ultimately squeezing HPL's
margins.
mrcplast.com
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