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Stand-off over power policy

The Finance and the power ministries are at loggerheads over the new mega power policy. BT learns that the Finance Ministry has refused to extend tax concessions to captive power plants (CPPs) and merchant power plants (MPPs).

Print Edition: March 9, 2008

Sushil Kumar Shinde
Sushil Kumar Shinde
The Finance and the power ministries are at loggerheads over the new mega power policy. BT learns that the Finance Ministry has refused to extend tax concessions to captive power plants (CPPs) and merchant power plants (MPPs).

The Department of Revenue claims that “fiscal concessions, besides distorting the tax structure, act as hidden subsidies and are unfair to other sectors that do not enjoy similar treatment.”

The mega power policy currently gives waiver from customs duty on equipment imports and a 10-year tax holiday. While suggesting changes in the mega power policy to make CPPs and MPPs eligible for tax concessions, Power Minister Sushil Kumar Shinde asserted that they would play a crucial role in increasing the country’s generation capacity.

Amit Mukherjee

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