Union Budget 2012: Power firms seek extension of tax holiday

NEW DELHI: Power companies have sought extension of the tax exemption to all power projects, including generation, transmission and distribution.
Indian Electrical and Electronics Manufacturers Association (IEEMA) demanded extension of tax exemption to all power projects in line with other infrastructure projects like roads, airports, ports and railways.
The power sector has achieved 76 per cent of the generation target for 2011-12 in the first nine months of the fiscal, the Economic Survey 2011-12 said.
The growth in nuclear, hydro and thermal power generation was at 33.2 per cent, 19.2 per cent and 6.7 per cent respectively.
The Power Ministry launched an initiative for development of coal-based super-critical (energy efficient and environment friendly) ultra mega power projects (UMPPs) of 4,000 MW capacity in 2007.
FICCI in its pre-budget memorandum has sought exemption of service tax to infrastructure projects in power sector. This would reduce the cost of Power Generation, as Power Generation Companies are not entitled to credits on tax paid on procurements.
With acute fuel shortage hurting projects, private power producers, including Reliance and Tatas, have asked the Finance Ministry to abolish five per cent duty on coal imported for power plants.
Presenting a slew of proposals to be considered for the 2012-13 Budget, the Association of Power Producers (APP) has also asked for customs duty exemption for various facilities such as coal transportation required for mega power projects.
Meanwhile, the Ministry of New and Renewable Energy has sought extension of existing incentives for the wind energy sector in the Union Budget. This would ensure growth momentum in the coming years after the sector added record 10,500 megawatt in the 11th five year plan, government and industry officials said.