A bench stayed the November 11, 2013 order of the board after the Fertilizers Association of India (FAI), an asso- ciation of 22 fertiliser units, moved a petition saying the order would result in burdening them with additional liability of about Rs 540 crore.
The petition said, the order is to benefit GMR and the decision of the board was taken without hearing the Centre or any other affected party which is against the principle of natural justice. PNGRB in its order last year directed the RGTIL to provide within 40 days access to GMR Energy under the provisions of PNGRB (Access Code for Common or Contract Carrier Natural Gas Pipeline) Regulations, 2008.
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PNGRB had passed the order on the complaint of GMR Energy against RGTIL, which is operating a common carrier pipeline, in which it has said that RGTIL was not providing it open access to transport natural gas from west coast to its power plants in Andhra Pradesh.
FAI said in its petition that the order of the board would "burden fertiliser units with additional liability of about Rs 540 crore to exclusively benefit power units and irreparably prejudicing fertiliser units by covering central sales tax of 2 per cent being imposed upon such transactions to state sales tax at the rate of 14.5 per cent."
It said, "The board pas-sed the order without hearing the FAI or the Union of India significantly when the impugned directions do not make the said arrangement tax / revenue neutral and convert a Central Sales Tax arran-gement to State VAT contr-ary to the guidelines of swapping natural gas issued by the ministry."
The board had directed RGTIL to allow in 40 days to act upon its directions for virtually transporting RLNG from the west coast to east coast (Andhra Pradesh) customers by physically delivering KD-D6 gas to customers inside the state and RLNG to customers outside the state which is a swapping transaction as defined under guidelines on swapping of natural gas issued by the Ministry of Petroleum and Natural Gas.
Reliance Industries Ltd and GAIL had entered a swap deal of Re-liquefied Natural Gas (RLNG) with natural gas to be fed into the grid pipeline in Andhra Pradesh for supply to the gas-starved plants.
The petition by FAI has been filed against Department of Fertilizers, PNGRB, GMR Energy, seeking a direction to the board that swapping, if any, must protect their interests by ensuring excess levy is borne by the beneficiary.
It has also sought a direction to the board to comply with the swapping guidelines.