Petronet-LNG still fighting old Dahej tax bills
Eleven years have passed, but Petronet-LNG refuses to back down in its fight with the Gujarat energy department over electricity taxes.
A company source expects the disputed electricity tax amount to cross Rs100cr ($12m) by next year (2025). "We've been writing to the collector of electricity duty (tax) and (the state energy minister) Kanubhai Desai," says a Petronet-LNG source.
"Last month (September 2024), we even visited Gandhinagar and continue to make representations." Trouble began in 2013 when the collector of electricity duty in Gandhinagar sent a notice to Petronet-LNG classifying its LNG import, regasification and supply business under the "storage’ heading and not under "industrial undertaking’ as claimed by Petronet-LNG.
Any business classified under "storage’ with the code HTP-IIA attracted electricity duty at 45% instead of 20% for an "industrial undertaking’ with the code HTP-I. Since then, the Gujarat government revised the rates from 45% to 20% for businesses classified as storage and 20% to 15% for businesses classified as industrial undertakings.
Petronet-LNG continues to pay at the lower 15% rate. Because of the difference in the rates, Petronet-LNG now owes Rs97.26cr ($11.54m) for its 17.5m t/y Dahej LNG terminal retrospectively from 2005-06, after the terminal began operating in 2004-2005.
This unpaid tax amount has increased from Rs80.99cr ($9.6m) on March 31 (2022) to Rs86.20cr ($10.2m) on March 31 (2023) to Rs97.26cr ($11.54) by March 31 (2024). Petronet-LNG challenged the legality of the bill by filing a petition in the Gujarat High Court.
On July 1 (2014), the court cancelled the supplementary bill notice and sent the case back to the collector of electricity duty. "Year after year, hearings take place at the Gandhinagar office," complains Petronet-LNG.
"But we are still awaiting a final order." Perhaps the only progress is that the outstanding amount just keeps increasing.
Petronet-LNG fears the government might pressurise it to pay some amount and close the case. "Justice delayed is justice denied," says our Petronet-LNG source.
"But we don’t have any option but to continue this fight."