Customs Duty on Electricity – Retrospective Shock – Now some Relief (only for one?)
BUDGET 2010, imposed a 16% Customs Duty on 'electrical energy' cleared from a Special Economic Zone into Domestic Tariff Area or non processing areas of Special Economic Zone. This was retrospectively effective from June 26, 2009.
Now the Government has announced some major relief to electricity sellers from SEZs.
The new rates are:
if removed from power projects of 1000 MW and above,- | if removed from power projects of less than 1000 MW,- | |
(i) using imported coal as fuel; | Rs. 100 per 1000 kwh | Rs. 40 per 1000 kw |
(ii) using domestic coal as fuel; | Nil | Nil |
(iii) using domestic gas as fuel; | Rs. 110 per 1000 kwh | Rs. 60 per 1000 kwh |
Assuming that a unit of power is sold for Rs. 5/- the duty payable would have been Rs. 800/- for 1000 kwh, whereas now it is a maximum of Rs. 110/- and nil if domestic coal is the fuel.
Why was the duty imposed in 2010 Budget and why this massive concession given now? Who does it benefit?
The Hindu Business Line reported today that Adani Power is to gain up to Rs 1 Crore per day. The report also says that Adani Power is perhaps the only company to commercially sell electricity from an SEZ and so it is also possibly the only beneficiary of this sop.
Now this notification also makes some cosmetic changes to the condition for import of zipper, velcro tape etc,.The Notification should not look as favouring just one party!
Please also see - 03.03.2010
Notification No. ,Dated: September 6, 2010