The Hindu : Business : Duty cut sought on captive power plant equipment

Online edition of India's National Newspaper
Friday, Dec 24, 2004

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Duty cut sought on captive power plant equipment

By Our Special Correspondent

NEW DELHI, DEC. 23. The Associated Chambers of Commerce and Industry of India (Assocham) has asked the Union Finance Ministry to bring down the import duty on goods required for setting up of captive power plants by 50 per cent in the budget proposals for 2005-06 to give a boost to the captive power sector.

The chamber has also demanded that the new duty structure should be within the range of 20 per cent instead of the prevailing duty structure of 40 per cent.

In a representation submitted to the Government, the President of the chamber, Mahendra K. Sanghi, has said that at present, equipment required for captive power plants, the capacities of whose exceed 5 MW attract a basic custom duty of 20 per cent along with additional custom duty of 16 per cent. Thus, the total duty works out to about 40 per cent, which is on the high side, and, therefore, needs to be brought down.

He further pointed out that in his previous budget proposals, the Finance Minister liberalised the mega power project policy by bringing down the import duty on equipment needed to set up mega power plants of over 1,000 MW capacities by about 40 per cent in totality.

He, therefore, proposed that the cap for mega size power projects should be removed and the tax structure for captive power plants should be brought on a par with the other power projects.

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