Latest Expert Exchange Queries

Make your inventory and invoicing software GST Ready from Binarysoft info@binarysoft.com
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: form 3cd :: articles on VAT and GST in India :: TAX RATES - GOODS TAXABLE @ 4% :: ARTICLES ON INPUT TAX CREDIT IN VAT :: VAT Audit :: cpt :: ACCOUNTING STANDARDS :: VAT RATES :: list of goods taxed at 4% :: TDS :: ACCOUNTING STANDARD :: Central Excise rule to resale the machines to a new company :: due date for vat payment :: empanelment :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes
 
 
Sales Tax »
 Assam government to dismantle all sales tax check-gates post Goods and Services Tax
 Income tax: How to calculate capital gains tax on sale of old jewellery
 Six arrested for posing as Sales Tax officers, extorting money
 Insurance Agency Mergers and Acquisitions in Q1 "Explode," OPTIS Partners' Report Reveals
 Sales tax sleuths raid spare parts shops in Meerut's infamous Sotiganj market
 Income Tax: How offshore income could be taxed twice
 India finalises bills to launch new sales tax in July
 NMC to implement new tax system from Apr 1a
 13 per cent sales tax boost post demonetisationa
 Arun Jaitley May Lower Corporate And Income Tax Rates But Hike The Service Tax Rate
 Tax on high seas sales becomes dispute area

RIL to suspend gas supply to 4 fertiliser plants from tomorrow
October, 05th 2011

Reliance Industries has served a notice for suspension of gas supplies to four fertiliser plants in Uttar Pradesh from tomorrow unless they enhance their financial guarantees to cover for state sales tax.

RIL on October 1 served a notice for suspension of supplies to plants of Indo Gulf Fertiliser, IFFCO, KRIBHCO, Shyam Fertilisers and Tata Chemicals from 0600 hours tomorrow, sources privy to the development said.

The fertiliser firms, which produce about 2 million tonnes of urea from gas sourced from RIL, are opposed to providing financial guarantees in the form of letters of credit (LC) to cover for liabilities arising out of the levy of local sales tax on gas sales, as it would increase the cost of production and subsidy payouts.

RIL supplies some 4 million standard cubic metres per day of natural gas from its eastern offshore KG-D6 fields to these plants. Like elsewhere in the country, it has been charging central sales tax of 2 per cent from users in Uttar Pradesh.

However, the state government has refused to accept these transactions as inter-state sales and have demanded that local sales tax of 21 per cent should be paid. Tax as the liability of consumers has been clearly enshrined in the Gas Sales and Purchase Agreement (GSPAs) RIL signed with fertiliser and other users.

Naturally, users should have contested the demand for higher sales tax, but strangely, RIL went to the Allahabad High Court challenging the demand. The High Court on July 26, 2010, stayed the Uttar Pradesh government demand. The state government has appealed against the stay in Supreme Court.

Sources said RIL is demanding that users in Uttar Pradesh enhance the value of their Letters of Credit, which were previously submitted as guarantees against default, to cover for payments in case the state sales tax liability was to materalise.

So far, state power utility NTPC is the only firm that has enhanced its LC, while fertiliser firms have not complied with RIL's demand so far, leading to the notice for suspension of supplies.

While the fertiliser firms refused comments, the Fertiliser Association of India (FAI) has shot off letters to the Oil and Fertiliser Ministry protesting against the RIL move.

In an October 3 letter, FAI Director General Satish Chander said there was no need for enhancing the LCs as the Supreme Court has not vacated the stay given by the Allahabad High Court.

"Any increase in the limit of LC will increase the cost of domestic urea production and has a direct bearing on the subsidy payable by the government. The demand of RIL for a higher LC is totally unjustified," he wrote.

RIL had last year, too, threatened to suspend supply to the fertiliser plants with effect from July 15, 2010, if the value of their LCs were not raised.

While the threat was executed, RIL has again issued the notice because the tax liability, in case the Uttar Pradesh government's demand is upheld, amounts to a whopping Rs 750 crore.

While Chander asked for the intervention of Oil Secretary G C Chaturvedi and Fertiliser Secretary Sutanu Behuria in the matter, sources said RIL has also informed the Oil Ministry of the notice for suspension of supplies.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Outsourcing Test Solutions Software Testing Software Bug Testing Software Issues Tracking Software Issue Fix Software Code Optimization Database Design Optimization

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions