The Odisha government will set up a committee to lay down a roadmap for a downstream petrochemical complex and review of fiscal incentives for the 15-million tonnes oil refinery project at Paradip.
This was decided at a meeting chaired by chief secretary G.C. Pati on Tuesday with Indian Oil Corporation Ltd. (IOCL) chairman B. Ashok and other state government officials.
The meeting decided to constitute a working group of senior officials of the state government and IOCL to lay down a roadmap for the petrochemical complex and the role of IOCL as an anchor tenant for petroleum, chemicals and petrochemicals investment region, said an official release.
The committee would also review the fiscal incentives under a fresh memorandum of understanding (MoU) to be signed for Paradip refinery project, said the release.
The refinery is expected to be commissioned by December and Prime Minister Narendra Modi would dedicate the project to the nation, said IOCL sources.
The state government signed an MoU with IOCL in 2004 for establishment of a nine million tonnes oil refinery. IOCL enhanced the refinery capacity to 15 million tonnes.
In view of delay in project commissioning, which was expected to be completed by 2009-10, a paradigm shift in tax and regulatory regime in petroleum sector and the necessity to set up a downstream petrochemical complex for investment and job opportunities needed to be discussed before a fresh MoU was inked, said an IOCL official.
As per the MoU signed in 2004, the state finance department had notified several financial incentives, including deferment of Value Added Tax for 11 years from the year of commercial production.
The MoU also provided for exemption of central sales tax for 30 years, entry tax exemption on crude oil and exemption of sales tax for 11 years.
The Odisha government is considering withdrawal of the clause regarding deferment of VAT for 11 years when a fresh MoU is signed.