Tax hike on captive power plants shocks business

TNN | Updated: Jul 11, 2019, 12:51 IST

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JAIPUR: The relief on stamp and registration duty may have made some happy but the tax increase on captive power plants has come as a shock to the industry. Chief minister Ashok Gehlot announced to raise the duty on power produced by companies for their own use was increased from Rs 40 paise per unit to Rs 1.

Several big industries like Shree Cements and Hindustan Zinc had set up power plants when the state was not in power deficit. Sources in the industry said that the duty hike is contrary to the spirit of the new Congress government which is warming up to industry in a big way. “The duty hike will undo lot of good measures that this government has tried to do for the industry. The duty outgo will have a huge impact on the companies and will discourage companies to set up their own captive units,” said an official of the company will be hit by the duty hike.
Besides the duty, other industry specific proposals are expected to end lot of uncertainties the business community was grappling with.
Chief minister Ashok Gehlot tried to put an end to the legacy tax issues by proposing an amnesty scheme that would shield the business community from the harassment of tax officials.
“We had been urging the government to open the window to resolve the legacy tax issues after the GST regime was introduced. Hope the uncertainty will end now. Moreover, the move to address GST invoice mismatch was very urgent and the government has recognized it,” said Nitin Gupta, head CII-Rajasthan said.

As per the proposals, startups raising loans will not have to pay any stamp duty now. Even though, they used to pay 0.5% as duty, the government has recognized the relevance of startups is a big thing, said and entrepreneur.
Rajiv Arora, president of Federation of Rajasthan Exporters, said the budget has taken into account the requirements of the industry and also has unleased new measures like developing an integrated industrial zones for industries based on refinery products which will create large-scale jobs.