Tata Power, Reliance Infra suppressed taxes worth Rs 434 cr: AAP

Written by PTI | Mumbai | Updated: Feb 27 2014, 14:18pm hrs
Arvind Kejriwal-led Aam Aadmi Party (AAP) today accused Reliance Infrastructure Ltd and Tata Power Ltd of misrepresenting taxes and putting a burden of Rs 434 crore on consumers over the last three years, a charge strongly denied by the two private power distribution companies.

The party also alleged that Maharashtra power regulator MERC made no moves to correct the misrepresentation of taxes by Reliance Infra and Tata Power and didn't take it to next judicial level after it was upheld by the appellate tribunal APTEL.

"Misrepresentation of taxes has surfaced in which both RInfra and Tata are involved, causing a burden of Rs 434 crore on Mumbaikars in the past three years.

"Power companies have been paying taxes at the rate of 18 per cent based on minimum alternate tax, but they claim full 35 per cent tax as part of their remuneration, which is paid by consumers," Maharashtra AAP Convener Anjali Damania alleged at a press meet here.

Tata Power, in a statement, said, "we are sad to note that such baseless allegations are being made by AAP without fully understanding the domain."

APTEL gave a verdict in favour of the power companies and left it to the discretion of MERC after comprehensively studying the issue, it said.

"Both these bodies (MERC & APTEL) represent subject expertise related to electricity business and such allegations against them without understanding the issue at hand is unfair. Tata Power would like to clarify the company strictly adheres to all legal and taxation norms," the statement said.

The company clarified that due to its very large investment outside Mumbai licensed area, its taxable profits were depressed, thereby reducing the overall taxable profits and consequently the tax liability.

"This did not mean taxable profits (and consequently tax liability) of the Mumbai licensed area business was reduced. If taxable profits of Mumbai licensed business were to be less, the benefit of the same would be passed on to the consumers," the private utility said.

RInfra, headed by Anil Ambani, too rejected the charge levelled by the Arvind Kejriwal-led party. "We are surprised at the false and baseless allegations which appear to have been made for purely political considerations. The AAP media release reflects their deliberate ignorance of truth and facts," the company said in a statement.

Last week, AAP targeted state utility Mahagenco, alleging corruption and inefficiency in its functioning and causing losses of several thousand crores.