Customs Duty on Electricity cleared from SEZs – DOC wakes up a little late
THE Department of Commerce (SEZ Section) has issued an instruction that “ in order to implement the Custom Notification No., dated 6.9.2010, it has been decided that operation of Rule 47(3) of SEZ Rules, 2006 is kept abeyance w.e.f. 6.9.2010 till further orders .”
Rule 47(3) of the SEZ Rules, reads as,
(3) Surplus power generated in a Special Economic Zone's Developer's Power Plant in the SEZ or Unit's captive power plant or diesel generating set may be transferred to Domestic Tariff Area on payment of duty on consumables and raw materials used for generation of power subject to the following conditions, namely:-
(a)proposal for sale of surplus power received by the Development Commissioner shall be examined in consultation with the State Electricity Board, wherever considered necessary:
Provided that consultation with State Electricity Board shall not be required for sale of power within the same Special Economic Zone;
(b) norms for production of a unit of power shall be approved by the Approval Committee;
(c)sale of surplus power to other Unit or Developer in the same or other Special Economic Zone or to Export Oriented Unit or to Electronic Hardware Technology Park Unit or to Software Technology Park Unit or Bio-technology Park Unit, shall be without payment of duty;
(d)for sale of surplus power in Domestic Tariff Area, the Unit shall obtain permission from the Specified Officer and the State Government authority concerned;
(e)duty on sale of surplus power to the Domestic Tariff Area shall be as provided for in this rule.
Now the Department of Commerce has kept the above rule in abeyance w.e.f 6.9.2010 to give effect to the Customs Notification No. 91/2010, but the Customs Notification 91/2010, has actually notified concessional rates of duty for electricity cleared from SEZ to DTA. And the duty on electricity cleared from SEZ to DTA was imposed with retrospective effect from June 26, 2009, by Finance Act 2010.
Now the DOC is keeping the rule in abeyance wef 6.9.2010, when the duty is imposed wef 26.06.2009.
Too many laws, too many officers and compounded confusion!
MOC, Department of Commerce Instruction No. 67; Dated October 28 2010.