The Hindu Business Line : Naphtha duty waiver for units switching to LNG

THE Finance Ministry on Thursday accorded a full waiver on excise duty on naphtha for power generation, which earlier attracted a rate of 27.6 per cent. The 740-MW Dabhol power project has been excluded from the duty waiver.

The exemption was applicable only to those power plants which are commissioned and will be switching over to LNG in due course, said officials.

The projects which qualify for the zero duty exemption are the Tamil Nadu Electricity Board-promoted 120-MW Basin Bridge plant, the 20-MW unit in Andhra Pradesh promoted by Nagarjuna Electric Generating Company, the Essar Power Ltd-promoted 515-MW Hazira project, the Gujarat Industrial Power Corporation Ltd-promoted 167-MW unit in Vadodara, the Reliance Salgaoncar-promoted 48-MW unit in Goa, the 220-MW Tanir Bavi project in Karnataka and the BSES Ltd-promoted 165-MW unit in Kerala.

According to officials, the Dabhol project will not qualify for the proposed duty reduction since the Government would like to accord all concessions as a package. Further, it is still not clear at this stage whether the project will be bid on equity or tariff.

According to the notification, the above power producers will require to produce a "certificate to the effect that the LNG terminal which is to supply LNG to the power project for which the supply is being made, has not been commissioned."

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