come into force before 2014. This will give us room to extend the profit-linked scheme by another year to provide relief to power projects that were supposed to be commissioned during the 11th Plan (by March 2012) but got delayed due to a variety of issues including fuel linkage,Ē said a government official who did not wish to be quoted.
The draft DTC Bill seeks to discontinue profit-based tax incentives and provides for an expenditure-based incentive (capital expenditure) scheme in relation to specific industries such as infrastructure (roads, ports and airports), power sector and SEZ developers. For the power sector, the government has been giving extension to the current regime to boost project development that would be crucial to bridge the widening energy deficit in the country. The peak deficit is still over 13% and the expectation is that this would increase if projects that are stuck are not cleared. Development of power sector is crucial for growth needs of the country as a deficit situation inhibits industrial activity.
Though the companies enjoying tax incentives under any existing scheme would continue to get them for the unexpired period, projects commissioned (and where developers have made some investment) after the cut-off date will be governed by provisions in the code.
The power ministry in its pre-budget memorandum to the finance ministry has also sought extension of Section 80 I A benefit up to 2017 to give benefit to ultra mega power projects and transmission projects planned for Twelfth five year plan period.