Customs duty waiver on naphtha, levy and retention of sales tax on motor spirit to help HPL turn around

13-Jun-11

Waiver of customs duty on naphtha and levy and retention of sales tax on motor spirit would help Haldia Petrochemicals Limited (HPL) to turn around from its present financial state as per PTI. "We have approached both the Centre and the state to deal with the twin issues," newly-appointed Managing Director of HPL Partha Bhattacharya told PTI. HPL manufcatures motor spirit as a by-product from its petrochemical plant. However, by virtue of this, HPL was classified as an oil company and the financial advantage of imposition of sales tax and subsequent retaining was withdrawn by the state government. This had been a big blow to HPL. On the other hand, imposition of 5% customs duty is also affecting the company bottomline as major portion of naphtha requirement of HPL was being met from imports. In the previous financial year, the company suffered a loss of Rs 276 crore and the EBIDTA for 2011 May was negative.