Include coal washeries, mining & LNG regasification in core sector: ministry  
1-Jan-1970


The power ministry, in a serious bid to give boost to the sector, has sought a number of sops from the finance ministry in the 2007-08 Budget. The ministry has pressed for the inclusion of coal washeries, coal-mining and independent regasification plant for LNG in the infrastructure sector, exemption of profits under 80 IA up to 2015 from 2010 to give benefit to ultra-mega power projects planned for the Eleventh Five Year Plan.

Besides, the ministry has urged that excise duty for power sector be reduced to a moderate level of 8% from the current 16% and countervailing duty be accordingly aligned. The ministry has emphasised on the need for the rationalisation of customs duty and suggested that there should be only two sets duties?concessional zero customs duty as exists for mega power project imports and another uniform set of duty for imports for other than mega power projects for goods/project import at customs duty of 5% and CVD of 8%.

After the overwhelming response for bids for Sasan and Mundra ultra-mega power projects, the ministry has identified 14 ultra mega transmission projects. In order boost these projects and also the ongoing national transmission grid project, the ministry wants that transmission projects, associated with mega power project, should get the same benefit of zero duty and project imports for transmission projects associated with other mega power project should attract the uniform customs duty of 5% and CVD of 8%.

All high power (765 KV and above) transmission equipment should also attract zero basic customs duty as is applicable for high voltage double current (HVDC) main equipment.

THE DEMAND
? The ministry has urged to reduce excise duty for power sector from the current 16% to 8%
? The ministry has emphasised the need for the rationalisation of customs duty
? It also seeks a complete customs duty waiver on import of LNG and natural gas

The ministry has argued that there should be complete customs duty waiver on import of LNG and natural gas, which currently attracts basic customs duty of 5%. This is in order to make LNG/natural gas an affordable fuel. Moreover, to reduce the high cost of LNG, the capital goods for LNG regasification plants should be fully exempted from customs duty and CVD. The ministry argued that in order to make investments in hydro-power projects attractive and investor-friendly, custom duty be exempted for construction equipment.

The Centre, which is in the midst of release of a new hydro-power policy, has estimated hydro potential of 1,20,000 mw in north-eastern states.

Besides, to achieve the capacity addition of 66,463 mw in the Eleventh Plan period, the ministry has said that concessional customs duty be imposed on cement, steel used in setting up of new projects and during expansion of existing ones.

Moreover, 100% duty waiver should be granted for all equipment used for creating the infrastructure for all equipment used for creating the infrastructure of decentralized distributed generation up to 5 mw.


Source: The Financial Express, New Delhi
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