Essar Oil Ties up 
5K Crore Funds to Meet Sales Tax Dues
New Delhi: Essar Oil said it has tied up 
5,000 crore loan to meet most of its Rs 6,169 crore sales tax dues to the Gujarat government.
"Essar Oil is confident that with this facility tied up it will be in a position to meet its entire payment obligations," the company said in a press statement.
"A new credit facility from domestic banks to provide a credit line of up to Rs 5,000 crore to meet its sales tax liability of Rs 6,169 crore" has been tied up, it said.
"The company continues to pursue the matter of repayment schedule of its sales tax liability both legally and with the Gujarat state government," the statement said.
The Supreme Court had in January said Essar Oil was not entitled to defer payment of sales tax, an incentive offered by the Gujarat government for the company to start production at its Vadinar refinery in the state by August 15, 2003.
Since the deadline was missed, the company lost right to defer sales tax payment by 17 years.
To recover dues, the Gujarat government had on July 9 attached three bank accounts of Essar Oil in Jamnagar. There after the company approached the Supreme Court which asked Essar Oil to deposit Rs 1,000 crore out of the sales tax dues by July 31.
Essar Oil MD & CEO Lalit Gupta said: "The new loan facility will enable Essar Oil to meet its sales tax liability. Our lenders have continued to be very supportive of the business, which remains well placed given the demand for high value fuels both in India and internationally."
On July 17, Essar Oil had informed the Supreme Court that it would pay Gujarat the sales tax liability of Rs 6,300 crore in instalments, the first of which will be deposited by July 30.
Essar Oil had approached the apex court against the order of the Gujarat High Court which had refused any relief to it for making the payment in instalments.
The case pertains to the sales tax deferment benefits accorded by Gujarat to investors. The benefit given to Essar Oil was challenged in the High Court which directed recovery of dues and subsequently the company also lost the case in the Supreme Court.
The Supreme Court had in April refused to review its January 17 judgement which quashed the Gujarat High Court order allowing Essar Oil to pay Rs 6,300 crore sales tax liability in deferred instalments and extended the time period of the state's tax incentive scheme.
The apex court had delivered the verdict on the petition by Gujarat challenging the 2008 high court order which had allowed Essar's plea on the issue. Following this on July 10, Gujarat attached Essar Oil bank accounts to recover the dues.
Essar Oil had availed Gujarat's capital investment incentive to premier/prestigious unit scheme 1995-2000 for its Rs 1,900-crore Vadinar refinery in Jamnagar district as a 100 percent export-oriented unit with a capacity of 9 million tonne per annum.
Source: PTI
5,000 crore loan to meet most of its Rs 6,169 crore sales tax dues to the Gujarat government.
"Essar Oil is confident that with this facility tied up it will be in a position to meet its entire payment obligations," the company said in a press statement.
"A new credit facility from domestic banks to provide a credit line of up to Rs 5,000 crore to meet its sales tax liability of Rs 6,169 crore" has been tied up, it said.
"The company continues to pursue the matter of repayment schedule of its sales tax liability both legally and with the Gujarat state government," the statement said.
The Supreme Court had in January said Essar Oil was not entitled to defer payment of sales tax, an incentive offered by the Gujarat government for the company to start production at its Vadinar refinery in the state by August 15, 2003.
Since the deadline was missed, the company lost right to defer sales tax payment by 17 years.
To recover dues, the Gujarat government had on July 9 attached three bank accounts of Essar Oil in Jamnagar. There after the company approached the Supreme Court which asked Essar Oil to deposit Rs 1,000 crore out of the sales tax dues by July 31.
Essar Oil MD & CEO Lalit Gupta said: "The new loan facility will enable Essar Oil to meet its sales tax liability. Our lenders have continued to be very supportive of the business, which remains well placed given the demand for high value fuels both in India and internationally."
On July 17, Essar Oil had informed the Supreme Court that it would pay Gujarat the sales tax liability of Rs 6,300 crore in instalments, the first of which will be deposited by July 30.
Essar Oil had approached the apex court against the order of the Gujarat High Court which had refused any relief to it for making the payment in instalments.
The case pertains to the sales tax deferment benefits accorded by Gujarat to investors. The benefit given to Essar Oil was challenged in the High Court which directed recovery of dues and subsequently the company also lost the case in the Supreme Court.
The Supreme Court had in April refused to review its January 17 judgement which quashed the Gujarat High Court order allowing Essar Oil to pay Rs 6,300 crore sales tax liability in deferred instalments and extended the time period of the state's tax incentive scheme.
The apex court had delivered the verdict on the petition by Gujarat challenging the 2008 high court order which had allowed Essar's plea on the issue. Following this on July 10, Gujarat attached Essar Oil bank accounts to recover the dues.
Essar Oil had availed Gujarat's capital investment incentive to premier/prestigious unit scheme 1995-2000 for its Rs 1,900-crore Vadinar refinery in Jamnagar district as a 100 percent export-oriented unit with a capacity of 9 million tonne per annum.
