KRL sees red in tax tangle

24 September 2001

Mumbai: The turnover tax levied by the Kerala state government might push the public sector Kochi Refineries Limited (KRL) into a corner, says KL Kumar, chairman and managing director of the company.

Addressing the 39th annual general body meeting of the KRL recently, Kumar said the refinery-specific turnover tax levied by the state government will impose an additional burden of around Rs 80 crore per year which will push the company into red at the current price-level.

When the administered price mechanism was in vogue, the turnover tax paid by the refinery was reimbursed from the oil pool accounts from a surcharge on sales tax collected from consumers by marketing companies and deposited in oil pool accounts.

When the petroleum sector was deregulated, the oil pool mechanism would cease to exist and consequently there would be no more reimbursements of turnover tax from oil pool accounts. He said KRL had already brought the matter to the attention of the state government with a request to restructure taxes.

During 2000-01, the company recorded above 100-per cent capacity utilisation - by processing 7.52 million tonne against the installed capacity of 7.50 MMTPA - and set records in a number of areas.

The throughput was 15,06,689 tonne (the pervious record was in 1999-200, when it was 14,16,324 tonne), LPG production was 3,48,772 tonne, aromatic production 94,351 tonne, motor sprit production 7,32,281 tonne, and aviation fuel production 82,663 tonne.