Tax holiday withdrawal to hit IndianOil
New Delhi   11-Mar-2008
IndianOil on Monday said the move to withdraw tax holiday to new refineries would result in lowering of profitability of its Rs 24,000-croreParadip refinery in Orissa. "The rate of return on capital invested in the 15-million-tonne-a-year refinery cum petrochemical plant will be lower by 1.5-2%,” IndianOil Chairman Sarthak Behuria said. Finance minister P Chidambaram had in his Budget for 2008-09 proposed to end seven-year income tax holiday for refineries commissioning after April 2009. The proposal would affect all proposed new refineries except that of Reliance Petroleum Ltd, a subsidiary of RIL, which expects to commission a 580,000 barrels per day export-oriented unit at Jamnagar by third quarter of the new fiscal. “The end of tax-breaks may mean up to Rs 5,000 crore outgo,” company director (finance) SV Narasimhan said. Oil and Natural Gas Corp (ONGC), which had planned a new 300,000 b/d refinery at Kakinada in Andhra Pradesh and doubling of capacity of its expanded Mangalore refinery to 600,000 b/d, is already reviewing its plans. "We are working on revised financials," company chairman RS Sharma said. India had planned to add 2.14 million b/d to its existing 2.98 million b/d capacity by 2012 to become a global refining hub.