BPCL, HPCL, Nayara Energy (ESSAR) dealers on Saturday demanded the Manipur government to retract the amended gazette published on March 20, 2023 notifying all oil marketing companies, having no retail depot in Manipur, to deposit Value Added Tax (VAT) for motor spirit including various aviation spirit and diesel oil.
Speaking to media at the dealer’s office in Uripok, convenor of BPCL, HPCL, Nayara Energy (ESSAR) dealers, RK Prakash, asserted that the new tax amendment imposed by the government in connection with oil taxation for dealers who source their product from outside the state, had no practical feasibility dealers in Manipur.
He highlighted that there are specific rules and guidelines for VAT deposit which the gazette had completely disregarded. VAT deposits are made after the product is sold to customers, not before, he added.
“VAT deposits are made after the final sales of the product is made but, the new gazette is contradictory and instructs dealers to make the deposit before any sales are made,” he said.
He questioned authorities concerned how VAT could be deposited based on an estimated total sale of the petroleum products. The instruction has loopholes which need to be addressed, Prakash added.
The convenor further pointed out that notification for implementation of gazette was circulated to the companies on March 31, 2023.
“The notification stated the amendment would be implemented from April, 2023; how could the government be so careless and notify such drastic changes just one day prior to implementation,” he said.
Hence, he pointed out that oil companies were unwilling to retail the oil to Manipuri dealers as they had no specific regulations and guidelines for such tax payment methods. Companies not retailing oil to Manipuri dealers will have huge implications for daily customers in the state, he added.
“The oil stock we have now will last for around 3 days, after that oil pumps of BPCL, HPCL and Naraya will face petrol shortage and customers will face tremendous difficulties,” he said.
Prakash stated the amendment will be applicable for oil companies which have a retail depot in Manipur but dealers who outsource their petroleum have to take into account various factors such as transportation risk, transit loss and others.
“On top of that oil prices are constantly fluctuating in Manipur as such it is not practical to deposit estimated tax amounts based on so many variables,” he added.
He claimed that Manipur is the first state in the country to enact such an amendment and appealed authorities concerned to mete out practical measures. Even if authorities want to amend tax guidelines, they should consult all stakeholders to map out an effective and beneficial regulation, Prakash added.
