Essar Oil has received a demand notice from the tax authorities of the Gujarat Government for repayment of the full amount of sales tax deferment benefit utilised by the company of approximately Rs 6300 crore , plus interest accrued.
On 18 January the Supreme Court had directed Essar Oil to pay Rs 6,309 crore in sales tax to Gujarat government after it lost a case seeking benefit of a government exemption scheme on sales from its Vadinar refinery in the state.
Essar Oil said that talks on the repayment plan may take another 60 to 90 days.
Essar was originally granted the sales tax deferment as part of a capital investment incentive scheme in Gujarat after it agreed to build a refinery there in 1999. The state government extended the benefit to the company, enabling the latter to defer the payment of sales tax by 10-17 years. But as the company was unable to meet the time schedule for setting up the refinery, the state government revoked the exemption.
Meanwhile, the company submitted its proposal to exit its corporate debt restructuring programme to tis lenders on Monday, reports CNBC TV18. Sources had told CNBC-TV18 that even though the lenders have approved Essar's exit proposal a consensus could not be reached on the recompense amount that Essar has to pay the banks to get out of the CDR ambit.
Updated Date: Dec 20, 2014 06:19:48 IST