Power India found that the Finance Ministry has recently notified a revamped duty structure prescribing an effective duty of over 22 per cent, including education cess.
However, as proposed by the MoF, the new duty is not going to be imposed on Ultra Mega Power Projects (UMPPs) and Mega Power Projects and expansion of existing mega projects which had received certificate of approval from the Power Ministry till July 19, 2012, the date on which the Cabinet took the decision.
With this as many as seven Ultra Mega Power Projects (UMPPs) and 106 Mega Power Projects will not have to pay higher duty for importing equipment's.
As said by Power Secretary P. Umashankar: “There is a list of projects given mega status or provisionally declared as a mega project. These will not be affected. But any other project beyond this list will have to pay duty as per Government notification.”
According to the leading power producers such as NTPC, Tata Power etc, the imposition of customs duty will increase the project cost which in turn will hinder the advancement of the sector.
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