Energy dept rejects SMC Power plea to waive energy duty

Energy dept rejects SMC Power plea to waive energy duty

Last Updated: Thu, Jan 10, 2013 19:51 hrs

The state energy department has rejected the plea of Jharsuguda-based SMC Power Generation to waive off energy duty imposed on it citing the explanation provided by the company as unsatisfactory.

“It was observed that the reasons stated regarding attrition at the company were not sound enough to be considered and even the delay in documentation was on account of defects and deficiencies found at the company plant during inspection,” said Chief Secretary B K Patnaik, presiding over the meeting on SMC Power plea.

Energy duty is levied on industrial and domestic consumers, who are supplied electricity by the state-run power utilities, over and above the power tariff. The duty is also levied on industries having captive power plants as per Odisha Electricity Duty Act, 1961. SMC Power Generation, which is into steel making business, started its 33 Mw captive power plant in December 2004, as per state industry department record. SMC had contested that since its power plant actually started in 2005, the energy duty levied on it from 2004 should be waived off. The state finance secretary had wanted to know what would be the total financial loss to the state exchequer if the company is allowed to not to pay the duty, which worked out to be Rs 10 crore.

The state energy department has been taking bold steps to increase energy duty collection. Encouraged by better energy duty collection in the last financial year, it has set a target of Rs 700 crore in 2012-13, as per a recommendation made by the state financial department. The energy department had collected Rs 551 crore in 2011-12 from electricity duty, up from Rs 500 crore target fixed for the year. In the current fiscal, the state has collected Rs 233.42 crore as electricity duty by August. The government decision to hike the duty to 20 paise per unit from 12 paise per unit in 2011-12, was widely criticised by industrial units. Central government-owned National Aluminium Company (Nalco ) has challenged the decision and moved to the Supreme Court, after losing the legal battle in Odisha High Court.

According to a written reply provided by minister (energy), Arun Sahoo in the state assembly, 32 industries operating their units in the state are saddled with arrears in electricity duty amounting to Rs 1,541.26 crore.

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