The Hindu Business Line : Maharashtra likely to alter tax sops for wind power projects

The Maharashtra Government could alter its sales tax incentives to the wind energy projects in the near future. It has found that a number wind projects have been setup only to take advantage of the sops.

The Planning department of the Maharashtra Government has taken a stern view on this issue.

The department in its comments, which have been incorporated in the new non-conventional energy policy document released recently, said wind energy has developed in the State mainly because of sales tax incentives equal to the cost of the project. Such incentives are also transferable and, therefore, those who have put up green cess project have reaped windfall profits.

The document said, “The wind units were set up primarily due to the incentives. Moreover, load factor of the wind mills units is rather low and seldom exceeds 20 per cent and wind power is available only in some period of the year and not through out the year.

When pressure on the electricity grid is maximum availability of wind power is least. In the light of above, the department may like to rethink and modify their proposal,” the document added.

‘Inevitable’

According to an analyst with a global consultancy firm, such policy changes are inevitable as all policies and incentives have a sunset clause.

Once the sales tax incentives are scrapped, new wind power projects could get affected.

But unless incentives are given to wind power companies they will make profits, he said.

A spokesperson for Suzlon Energy Ltd, said the company would be in position to comment on the policy only after it has studied it in detail.

Wasteland for projects

Keeping in view the recent confrontation between farmers and wind companies over land acquisition in the State, the policy has delineated ways in which wasteland could be used for wind farms.

The State Government-owned wastelands can be leased out for 30 years to wind farm projects at existing market rates, which will be based on the prime lending rate.

More Stories on : Non-conventional Energy | Taxation | Maharashtra

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