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Sunday, Sep 01, 2002

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Fiscal sops for water schemes

Our Bureau

NEW DELHI, Aug. 31

IN order to encourage private participation for taking up water supply desalination, purification and demineralistion activities, the Cabinet Committee on Economic affairs (CCEA) today announced fiscal concessions including exemption of customs as well as central excise duty.

These companies would be exempted from customs and excise duties on all machinery/equipment needed to establish these plants. The Finance Minister, Mr Jaswant Singh, said these concessions were being made to tackle the drinking water problems arising due to the shortfall in monsoons.

Exemption from Central Excise for pipes needed for delivery from the source of supply of raw-water for the plant and from the plant to storage facility would also be provided.

The Minister said on the direct taxes side, there was already a provision in Section 80-1A of the Income-Tax Act, which allowed a deduction of 100 per cent of profits of companies engaged in the business of providing any infrastructure facility which includes a `water supply project', as also a `water treatment system.'

In addition, plant machinery, equipment, and buildings established for this would be entitled to depreciation rate of 100 per cent per annum.

Mr Singh said that these schemes would come into effect immediately and concessions would not be available retrospectively.

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