X hits on this document





13 / 15

Prof S.L. Rao said that the logic for having a national fuel policy is that taxation can be used by govt. to promote or dissuade the Indian industry from going for one fuel or another.  But the govt. today has neither a national fuel policy nor  has a taxation policy which is coordinated between the fuels.  Therefore, it is essential to have both.  There are fuels we might like to encourage, and in an  open market prices cannot be influenced except by taxation.  So taxation as a part of national fuel policy is essential.

Mr. V.S. Ailawadi said that the average consumer tariff in 1992-93 was 128 paisa/KWH which has now increased to 303 p/KWH.  The interse cost amongst consumer categories is increasing. The power purchase cost in 1992-93 was 76 p/KWH, 1999-2000 166 p/KWH and in 2001 it is 184 p/KWH. One of the important factors  for higher power purchase costs is higher fuel costs.  The fuel element which constituted higher fuel cost was 33 paisa in 1992-93 which has gone upto 50.59 paisa in 2001.  For this one of the reasons is taxation.  Another factor is higher depreciation rate which was 9% in 1992-93 and now is 19.8%.  Interest payment is also one of the factors.  It was 22% in 1992-93 and is now 38.98%.  The power purchase cost has increased from 27.9% in 1992-93 to 48.5% per unit. The cost of fuel in coal based thermal plant per KWH has increased from 53 paisa to Re. 1.Fuel prices and duty structure are a key to controlling power prices. We should try to achieve a suitable framework to promote and increase the percentage share of hydro power. This can bring down the cost of power.  We should also ask for a review of taxation structures.  Duties and taxes have cascading effect and reflect in the cost of power.  Commercial orientation of SEBs is very crucial.  Unless SEBs become efficient, no measure or concessions can help.  Distributed generation can also help in cost reduction.

Mr. P. Bhullar said that taxation structures play a key role in investments by affecting returns.  Tax on dividend and distribution is a matter of concern. Debt equity structure plays a major role in IPP funding.  Funding of IPP projects is on a non-recouse basis and  entire cash flows come from the project cash flows.  We need long term debt that goes upto 14-15 years.  Any investor would want to make his investment secured and be levied with minimum taxes. Section 10-23G is one of the initiatives undertaken by the ministry.  Under this section investments from infrastructure capital fund or company / cooperative bank made either in the form of shares or long term planning in enterprises / undertakings which qualify as under section 80-IA (4) or 80-IAB, for computation of taxes the dividend interest in terms of long term capital gains earned out of these investments is not included in the total income.  Key issue is that from April 1, 2003 the income by way of dividends u/s 115(O)would also be included in the total income.  The provision that stands as on date does not exempt Section

Document info
Document views21
Page views21
Page last viewedFri Oct 21 20:25:26 UTC 2016