IPCL faces its biggest tax liability as H1 net profits jump 100%

29-Nov-05

jump in net profit for H1-2005 of the current fiscal. Tax provision is expected to cross Rs 500 crore by the fiscal end, already reaching Rs 275 crore compared with Rs 30 crore during the corresponding period last year. With this, IPCL is facing its the biggest tax liability this year because of limited avenues open to it for parking its funds this year and is scouting around for avenues to reduce its tax liability. The company's planned projects, such as new cracker capacity at Baroda complex or expansion of Dahej project are on hold or progressing slow. None of IPCL's three sites at Baroda, Dahej and Nagothane, have new on-going projects that could offer depreciation benefits to the company for tax benefits. IPCL plans to acquire Gujarat Chemical Port Terminal Co Ltd (GCPTCL). GCPTCL currently faces financial trouble, and in case of a IPCL takeover, GCPTCL losses could help IPCL reduce its tax burden.