SC to hear plea on levy of sales tax on Rill,British Gas,ONGC

The Supreme Court on Friday will hear a plea by the Gujarat government, seeking to levy sales tax of ₹ 4,000 crore on Reliance Industries Ltd (RIL), British Gas and Oil and Natural Gas Corp. (ONGC) for bringing gas to Hazira Port from Panna-Mukta-Tapti field, situated on the west coast.

The state is claiming that sales tax dues of around ₹ 4,000 crore are payable between 1998 and 2015 by the three companies, which had entered into a production sharing contract with the government of India for capital investment and exploration.

The court is set to hear the arbitration petition filed by RIL for resolving a gas pricing dispute arising out of the production sharing contracts the Union government entered into with the Mukesh Ambani-owned company. The change in the arbitration laws, which altered the legal position on who could hear pleas regarding appointment of an arbitrator, has resulted in this case being kept pending for some time. The dispute arises as the government has claimed that gas pricing is a policy issue which cannot be arbitrated upon