Revenge for Gujarat

Vol 15, PW 17 (08 Mar 12) News in Brief

Hurt by BG’s sudden decision to sell its 65.12% stake in Gujarat Gas, the Gujarat state government now wants to extract its ‘pound of flesh.

’ Last week the state energy department wrote to the state secretary finance S. Aparna, asking her to explore any potential ‘taxation alternatives’ which could be imposed on BG.

“Without our support BG couldn’t have grown Gujarat Gas to its current size,” complains state energy secretary DJ Pandian, when contacted by this report. “We could use any revenue we get from taxing BG to lay gas pipelines in backward areas of eastern Gujarat.

” Yet a tax expert claims Gujarat has no real option available, as only India’s central government can charge ‘capital gains’ tax on such a stake sale. “I think Pandian is just trying to scare BG with such talk,” he said.

But Pandian insists he plans to follow through with his threat, even if it means taking the matter to Gujarat’s Legislative Assembly. “If necessary we can even draft an ‘ordinance’,” he said.

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