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AHMEDABAD: Gujarat is set to save close to Rs 400 crore a year with the Centre revising its earlier notification of levying custom duty from the power plants that are supplying power from special economic zone (SEZ) into domestic tariff area. The charges for the power project developers have come down to just 10 paisa per unit instead of 16% duty, which was almost 50 paisa per unit for tariff of Rs 3 per unit.
In Gujarat, Adani group company Adani Power and its customer state utility Gujarat Urja Vikas Nigam Limited (GUVNL) will benefit the most. Adani Power operates 990 MW of generation capacity at Mundra SEZ and sells its electricity to GUVNL.
According to an energy expert, players like Adani Power that are catering to domestic tariff areas from SEZ will get major boost on account of revised notification. Adani Power will have to pay only 10 paisa per unit for its current generation of 20 million units of electricity instead of the earlier duty of 50 paisa. "It is saving close to Rs 1 crore a day, which will be doubled as Adani Power is planning to ramp up its capacity to 1,980 MW by fiscal end," said the expert. He added that the reduced duty rate would enable the power project developers in SEZ area to reduce their budgetary provisions for taxation dramatically.
Following the earlier notification of custom duty to the tune of 16%, Adani Power had approached the Gujarat High Court seeking injunction. The company would have been hit hard as it was planning majority of its proposed 20,000 MW of generation capacity at its Mundra SEZ. It is commissioning total 4,620 MW of power capacity at Mundra.
As per the revised rate for 1,000 MW power project, duty would be Rs 100 per 1,000 units in case of imported coal fired generation and Rs 110 per 1,000 units in case of gas-based generation. Similarly, projects below 1,000 MW of capacity will have to pay only Rs 40 per 1,000 units in case of imported coal fired station and Rs 60 per 1000 units in case of gas based project. Power projects running on domestic coal in SEZ area and operating in domestic tariff area will not be liable to pay custom duty.
Source: The Economic Times
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