Indian Oil tanks 6% on Rs 8,400 crore tax hit
Facebook is considered so valuable because it is more than the sum of its users. More than the world's largest social network, it is a fast-churning data machine that captures and processes every click and interaction on its platform.
Cash-strapped Indian Oil Corp (IOC) will have to pay over Rs 979 crore in unpaid entry tax to Uttar Pradesh government in the next two weeks after the Supreme Court asked the company to deposit half of the unpaid liability in cash.
IOC had challenged the Uttar Pradesh government decision to levy a $5.78 per barrel entry tax on crude oil the company imported into the state for processing at its 8 million tonnes per annum refinery at Mathura in the Allahabad High Court.
"The High Court of Allahabad (on December 23, 2011) dismissed IOC's writ petition and upheld the UP Entry Tax Act 2007, whereby the state of Uttar Pradesh was entitled to levy entry tax on crude oil brought into Mathura for refining in the Mathura refinery," IOC said in a stock market filing.
Subsequently, IOC challenged the High Court order in the Supreme Court. The apex court passed an interim order on January 17, 2012, staying the operation of the judgement of the Allahabad High Court subject to "IOC depositing 50 per cent of the accrued tax liability/arrears under the UP Entry Tax Act, 2007, and furnish(ing) a Bank Guarantee for the balance amount" within four weeks (by February 14), it said.
"The amount so deposited/paid and the bank guarantees furnished are, however, subject to the result of the appeal," IOC said, adding that the matter was being examined legally.
Company officials said IOC would be immediately required to pay about Rs 979.17 crore, half of Rs 1,958.34 crore Entry Tax and interest thereon demanded for the period from 1999-2000 to 2007-08. A bank guarantee for the balance 50 per cent would also have to be deposited by February 14. In addition, IOC has to file the tax returns from April, 2008, till now within four weeks (by February 15) and thereafter within six weeks of the assessment, pay 50 per cent of the assessed amount by cash (estimated to be Rs 2,300 crore till November, 2011) and the balance 50 per cent through a bank guarantee.
The demand for interest shall, however, be extra (estimated at Rs 1,478 crore for period up to March, 2012, of which half would also payable by cash and the remaining by bank guarantee).
The official said IOC's total liability toward Entry Tax on crude oil and natural gas for 13 years is estimated at Rs 10,966 crore (including interest of Rs 2,098 crore). Of this, IOC had paid Rs 2,362 crore from 1999-2000 to 2006-07.
The additional provision for the Entry Tax liability up to March, 2012, is estimated to be Rs 8,411 crore, which may have to be made against IOC's profit in the current year.