New Delhi:
State-owned Oil and gas corporation (ONGC) on Tues aforementioned it'll
charm against the Gujarat state supreme court order asking it to pay to
Rs ten,000 large integer in past royalty dues, oral communication it
cannot pay the levy on a worth it hasn't accomplished.ONGC Chairman and administrator Sudhir Vasudeva aforementioned on sidelines of the eighth Asia Gas Partnership Summit here.
The Gujarat state supreme court had last week directed ONGC to pay royalty on petroleum on the gross worth it bills to refiners. the corporate presently pays royalty on information superhighway or actual worth accomplished when letting fuel grant discounts.
The company produces regarding vi million tonnes petroleum each year from Gujarat and if the order is to be enforced, it'll ought to pay Rs nine,000 large integer to Rs ten,000 large integer in past dues from 2008.
"The implications square measure terribly huge for U.S.A.. we've to pay past arrears then there'll be continual payments once a year," he said. "We haven't however calculated the impact as we have not however seen the judgement. The arrears itself are going to be regarding Rs 9000 large integer to Rs ten,000 crore."
A division bench headed by jurist Bhaskar Bhattacharya and Justice JB Pardiwala had last month directed ONGC to pay variations in royalty on petroleum at intervals 2 months and conjointly pay royalty, henceforth, to regime at market rate (gross request price).
According to the Oil Field Act, ONGC is needed to pay twenty per cent royalty on worth of petroleum it extracts from on-land oil blocks to the state governments.
Vasudeva aforementioned the implications of the judgement square measure grave as different states too could imitate in exigent royalty at gross worth.
ONGC until 2004 paid royalty on gross request. But, in 2004, the Union government asked it to produce crude to refiners like Indian Oil corporation Ltd (IOCL) at discount as per burden-sharing mechanism.
Since then ONGC paid royalty on discounted worth, leading to reduction of royalty paid to Gujarat.
The state conjointly complained to the Centre during this regard.
In 2011, the regime filed a petition before the state supreme court, stating that it ought to be paid royalty at market rate and therefore the distinction in royalty payment since 2008 at pre-discount rate (in comparison to promote rate) was computed at Rs nine,000 large integer to Rs ten,000 crore.
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