Duty free import of transmission equipment likely
The government is actively considering a proposal to allow duty free imports of transmission equipment required for new projects to bring them in line with the zero duty import of power generation projects. The import of transmission equipment currently attracts a 5% duty.
The move is expected to give a fillip to the transmission sector, where investment to the tune of Rs1,60,000 crore is envisaged during the Eleventh Plan period (2007-12). If given the go-ahead by the finance ministry, the waiver will benefit public sector monopoly Powergrid Corporation that controls the inter-state transmission networks.
Private sector companies expected to gain from the proposed duty waiver include majors like Essar Power, JSW Energy, Reliance Power Transmission, Larsen & Toubro, CESC, Jindal Power, Sterlite and Lanco which are participating in the bidding for transmission projects recently opened up for the private sector.
In addition to duty waiver on imports, the power ministry has also sought a cut in customs duty on electrical equipment required for operation and maintenance works of transmission networks from the current rate of 7.5%. The ministry has also sought the removal of 4% special additional duty (SAD) on transmission equipment and a cut in 8% excise duty.