June 26, 2012.London-listed Essar Energy is in advanced talks with banks for a $1-billion loan to meet its sales tax liability of $1.2 billion to the Gujarat government, the company said. The firm has to pay sales tax because, the Supreme Court set aside a Gujarat High Court judgement permitting Essar Oil to avail of sales tax deferral benefits for its Vadinar refinery in Gujarat. Essar Oil is 87% owned by Essar Energy. The crux of the dispute is whether the Vadinar refinery is eligible for sales tax deferment under an erstwhile incentive scheme of the Gujarat government. Since the refinery started production later than the specified time, the Gujarat government held the company ineligible for the benefit.