Budget 2016: IPPAI bats in favour of tax incentives for power sector

Ahead of Union Budget 2016 which Finance Minister Arun Jaitley will announce on February 29, Indian power producers have proposed to the government a slew of tax benefits to incentivise investments in the sector.

In a letter to the ministries of finance, coal and power Independent Power Producers Association of India (IPPAI) asked the government to extend a 10-year tax holiday to companies that start power generation by March 31, 2020.

“Industry players have called for the extension of the sunset tax clause for power companies to include plants that provide power till March 2020 as opposed to 2017 earlier,” said the letter.

The association has also asked for minimum alternate tax to be reduced to 10 per cent. With regards to coking coal, IPPAI has asked for reduction in customs duty on it.

“Import duty of coking coal had been increased to 2.5 per cent in the Budget for 2014-15.” It said a negligible quantity of coking coal was available domestically, and therefore called for duty on it to be exempt.

IPPAI has also contested the clean energy cess levied on thermal power producers asking that it should be restricted to only those power producers who do not adopt clean technologies / modernise their plants.

Image credit: Indiatimes