Indian Farmers Fertilizer Cooperative (IFFCO), a major fertilizer supplier, fears it will be forced to shut operations in Uttar Pradesh as Reliance Industries Limited (RIL) has agreed to pay under protest a disputed tax levied by the state on natural gas, and pass the burden to customers.
IFFCO use to pay Rs2 crore a month, which have now increased to 21 crore, as instead of the regular 10% VAT rate we are paying the penal rate of 26%. The UP government had levied VAT on Reliance's gas from April 2009.
RIL secured a stay order against the state levy from the high court, but subsequently when the state approached the Supreme Court the company told the apex court in January this year that it will start paying VAT from February 1, 2012, and pass on the burden to consumers.
RIL supplies gas to four fertilizer companies in the state - IFFCO's Aonla and Phulpur units, Kribhco's Shahjahanpur plant, Indo Gulf Fertilizer's Jagdishpur unit and Tata Chemicals' unit at Babrala.
....more info
IFFCO use to pay Rs2 crore a month, which have now increased to 21 crore, as instead of the regular 10% VAT rate we are paying the penal rate of 26%. The UP government had levied VAT on Reliance's gas from April 2009.
RIL secured a stay order against the state levy from the high court, but subsequently when the state approached the Supreme Court the company told the apex court in January this year that it will start paying VAT from February 1, 2012, and pass on the burden to consumers.
RIL supplies gas to four fertilizer companies in the state - IFFCO's Aonla and Phulpur units, Kribhco's Shahjahanpur plant, Indo Gulf Fertilizer's Jagdishpur unit and Tata Chemicals' unit at Babrala.
....more info