The politics over withdrawal of tax sops to IOCL's Paradip refinery got shriller as Union Petroleum Minister Dharmendra Pradhan on Sunday said BJP's surge in panchayat elections in Odisha was the reason behind the move."I can understand the ruling Biju Janata Dal's worries and anger after the impressive show put up by the Bharatiya Janata Party in panchayat elections. But, you (Chief Minister Naveen Patnaik) should not harm the state's interest by withdrawing interest-free credit for 11 years to the Indian Oil Corporation Ltd. due to anger against the BJP," Pradhan said.He said the state government decision to withdraw tax sops will have an adverse impact on other state projects which in turn will hit the unemployed youths hard."Therefore, I request Naveen Babu to refrain from causing harm to the state's interests, mainly the jobless youths," said the minister.
He said the agreement between the state government and IOCL with a clause for interest-free credit was for 11 years.Pradhan rubbished the state government claim that the refinery capacity was unilaterally increased to 15 million tonnes per year from nine million tonnes per annum.The Odisha Cabinet has withdrawn the tax incentives given to the Rs 34,555-crore Paradip refinery. It withdrew the promised 11-year deferment on payment of sales tax on Paradip refinery products sold in the state.BJD spokesperson Pratap Deb said the tax incentives were given to the IOCL to make the project viable."The project was supposed to be commissioned in 2008-09, but it was commissioned in 2015. The IOCL violated the terms and conditions of the Memorandum of Understanding. Due to delay in the project's commissioning, the state government is incurring loss in terms of revenue," said Deb.He said the public sector company has made about Rs 15,800 crore profit from the refinery.