An Indian court has ruled that the country’s biggest refiner, Indian Oil Corp, must pay entry tax on the crude it supplies to a plant in a northern state, the company told the country’s stock exchange on Wednesday.
IOC said the order could have “financial implications”. It did not say when the Allahabad High Court in the northern state of Uttar Pradesh, where the refinery is based, gave the verdict.
The state-owned refiner’s stocks fell about 6 percent to 271.50 rupees a share, the steepest decline in 14 months.
IOC then appealed against the order in Supreme Court which stayed it on Jan. 17 on the condition that IOC deposit 50 percent of the taxes sought from it and furnish bank guarantees for the balance amount.
IOC said it is examining the matter “legally for further course of action.”
“The amount to be furnished is yet to be assessed … the entry tax is five percent of the crude cost,” said P.K. Goyal, head of finance at IOC.
IOC’s Mathura refineRy in Uttar Pradesh has a processing capacity of 160,000 barrels per day, accounting for about 12 percent of its overall capacity.