Haldia Petrochemicals could get tax relief with likely intervention by Centre

28-Jul-15

Haldia Petrochemicals likely to get relief from the Directorate General Foreign Trade (DGFT) from the Rs 2,600 crore fine as it failed to respect the export obligation between 2010 and 2013, as per businessstandard.com. According to a senior government official in West Bengal Industrial Development Corporation (WBIDC), HPL will be granted more time to clear the penalty and a certain portion might be waived off. The technicalities of the deal are still being worked out. State finance minister Amit Mitra is reported to have met the Finance Minister to seek his intervention in this matter, and has been assured that all steps would be taken to ensure that the company continues operation. The company which is now being run by the Purnendu Chatterjee-led The Chatterjee Group (TCG) has been performing 85 per cent efficiency and production is on at full capacity. The consortium of HPL's lenders led by Industrial Development Bank of India (IDBI) had recently agreed to sanction Rs 2,300-crore restructuring package to the plant. If HPL has to pay the penalty, it would put the future of the company in jeopardy. " We are closely watching the issue as there is a huge exposure to HPL," said a banker. A source in TCG pointed out that the relaxation of customs duty would also determine how fast the stake sale process of the company gets completed. "It should be remembered that this liability was not mentioned in the quotation when we had bid for it, hence we are not bound to pay it," the source mentioned. TCG had agreed to buy 520 million shares (30.8 per cent of the equity) of WBIDCat Rs 25.10 each, matching the price offered by Indian Oil Corporation after the government invited an Expression of Interest last year. HPL, one of the largest manufacturers of high-density polyethylene in the country, supplies different grades of polymers mainly in the eastern Indian region.