Mumbai, Feb. 17: Essar Oil has suffered a net loss of Rs 3,986 crore in the third quarter ended December against a profit of Rs 273 crore in the year-ago period.

The loss has been attributed to a provision of Rs 4,015 crore made by the company towards the reversal of sales tax incentive income.

Last month, the Supreme Court had overturned a Gujarat high court ruling permitting Essar Oil to defer sales tax payment.

Following this, the state government asked the company to repay about Rs 6,300 crore in sales tax along with the accrued interest, while Essar Oil filed a review petition in the Supreme Court.

Essar Oil today said as a prudent measure, pending decision on the petition, it had reversed the income of Rs 4,015 crore as an exceptional item during the period.

The firm said it had not provided for an interest of Rs 1,752 crore on sales tax liability as advised by the Gujarat commercial tax department.

The company’s revenues rose marginally to Rs 13,897 crore from Rs 13,809 crore in the year-ago quarter.

Throughput at the Vadinar refinery fell to 2.81 million tonnes (mt) from 3.73mt last year because of a 22-day shutdown during the period. It was part of a 35-day planned shutdown in September-October.

The company plans to ask its parent Essar Energy to convert its FCCBs of Rs 1,396 crore in the company to equity immediately.