India-focused energy firm Essar Energy Plc's subsidiary Essar Oil Limited made certain announcement to the Bombay Stock Exchange...
India-focused energy firm Essar Energy Plc's subsidiary Essar Oil Limited made certain announcement to the Bombay Stock Exchange.
In the announcement, Essar Oil said that the Supreme Court of India has set aside the judgment of the Gujarat High Court by which Essar Oil was entitled to avail of Sales Tax Deferment Scheme, ie, to pay Sales Tax to the State government in deferred installments. The company has availed of approximately INR 6.4 billion or about US$1.25 billion of Sales Tax benefit which was to be paid in deferred installments.
The company noted that it will provide further information in the matter after studying the judgment passed by the Supreme Court.
The company noted that the case relates to the Gujarat state's Capital Investment Incentive to Premier/Prestigious Unit Scheme, 1995-2000. The Supreme Court of India set aside the earlier judgment of the Gujarat High Court that extended time to Essar Oil Limited for the commencement of commercial production of the Vadinar Refinery.
Under the original incentive scheme the Vadinar refinery was required to commence commercial production by 15 August 2003 but the actual commencement of commercial production was after this date. Sales tax collected to date totals approximately US$1.25 billion.