Reliance Industries availed undue ‘accelerated depreciation’ benefit for a solar power project for which it also got Rs 22.49 crore incentive under a government scheme, a CAG report said today.
Under Demonstration Programme, solar photovoltaic power project developers availing Generation Based Incentive (GBI) were not eligible to avail Accelerated Depreciation (AD) benefit under the Income Tax Act 1961, as per the official auditor’s report tabled in Parliament today.
“This was not ensured by Ministry of New and Renewable Energy/Indian Renewable Energy Development Agency (IREDA) before releasing GBI claims of Rs 22.49 crore to Reliance Industries Ltd (RIL). This resulted in both GBI and AD being claimed by RIL in the period August 2010 to December 2012,” CAG said.
An RIL spokesperson said, “RIL has not claimed accelerated depreciation for its 5 MW solar power plant at Nagaur in Rajasthan, as mentioned in the CAG report tabled in Parliament today. We would take it up with the concerned authorities and clarify at the earliest.”
Rajasthan Renewable Energy Corporation Ltd (RRECL) in June 2008 approved a 5 MW Grid Interactive Solar PV Power Generation Project of Reliance Industries Ltd (RIL) at District Nagaur, Rajasthan under the Demonstration Scheme.
The ministry accorded approval for allowing GBI to RIL through IREDA.
In case of any violation of the conditions, IREDA was to immediately stop releasing the GBI to the project and refer the matter to the Ministry.
The report said that IREDA observed (July 2013) that RIL was claiming depreciation at a higher rate i.e. 15 per cent instead of 7.69 per cent in its income tax returns.
CAG observed that RIL had violated the above condition by availing AD rendering the project ineligible for claiming GBI under this scheme.
It further said that in violation of the programme conditions, IREDA disbursed GBI of Rs 22.49 crore from August 2010 to December 2012 to RIL.
However, IREDA on the request of RIL informed MNRE (November 2013) that the developer had given an undertaking (October 2013) that the claim for rate of depreciation would be revised from 15 per cent to 7.69 per cent in its income tax returns on or before March 31, 2014, for Assessment year 2011-12 and 2012-13 and requested to consider releasing further payment of Rs 7.79 crore up to September 2013.
MNRE did not respond to the request of RIL and claims of Rs 18.79 crore (January 2013 to December 2014) were pending, the report said, adding that the ministry confirmed (July 2015) IREDA’s reply and stated that the request of RIL for releasing further payment was not considered due to non compliance.