TN to bear extravagance to set up solar power plants
Posted on: 25/Sep/2014 2:16:22 PM
Though Tamil Nadu eyes on becoming India’s next solar destination, taxation rules stand as a hurdle to it.
Compared to rest of the states, Tamil Nadu will have to bear 8 per cent more on expenses for setting up solar power plants, as companies are bound to pay tax of the range 5 and 14.5 per cent more for procuring equipments for these plants.
Assuming a company wants to set up solar plant in Tamil Nadu with 10 MW capacity, it should then be able to shell out Rs 3 crore extra as the company should bear with the added VAT of 5 per cent on the required equipments for solar plants.
It is worth mentioning here that states like Andhra Pradesh, Punjab and Maharashtra provide complete refund of tax, whereas T.N has no such policies, say Dakshinamoorthi Arumugam, director of Marigold Steel and Power.
He also added that companies get their equipments and bill it from their offices at other state as it allows them have freedom of taking tax exemptions for inverters and similar other equipments on submitting Form C. This allows them have 2 to 5 per cent VAT reduction.
