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Solar companies protest against the new land tax

Solar companies protest against the new land tax

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Jaipur: Solar and wind power developers are receiving notices from state finance department for payment of land tax of Rs 2 per sq mtr imposed on them for the first time effective from April this year. The industry, which has been resisting the tax, has asked for time, even as it is raising the issue with Rajasthan Renewable Energy Corporation Ltd (RRECL) citing that the projects set up were through competitive biddings and the tax liability was not factored into cost analysis.

RRECL managing director Anil Gupta said they have received representations from the industry and are examining the tax provisions and also benefits available under Rajasthan Industrial Promotion Scheme, 2019 (RIPS-19).

“We are looking into aspects like if the solar power developers could be liable for the tax, given the fact that certain exemptions are provided in the RIPS, 2019. After examining all the aspects, we will present the industry’s case before the finance department through energy department,” Gupta told TOI. A back of the envelop calculation shows that the solar and wind projects would have to shell out about Rs 55 crore annually due to the land tax. The calculation takes into account a conservative size of 5 acre per megawatt for both solar and wind, whose cumulative installed capacity in the state is over 12000 MW.

The industry representatives said that solar and wind requires are parcels of land unlike other industries. The larger capacity, the bigger spread out of the area, because it is all about capturing the solar rays, they said. “Solar industry is different from other industries in the sense it needs huge tracts of land. That’s why levying land tax on solar or wind power projects defies all logic,” said Rajasthan Solar association in a statement. The industry body said, “Our members have received notices from the finance department (Tax Division) to deposit land tax and its subsequent annual return, which was not part of the earlier input cost working. Further the state’s solar policy having not clarified any aspect on this land tax, our members are unaware of this. And hence the exciting solar projects have not been set up under this new tax liability.”

In another letter to RRECL, National Solar Energy Federation of India (NSEFI), said, “Furthermore, owing to the current scenario due to Covid-19 and the various restrictions on movement and transportation currently in place, our member Companies will be unable to mobilize personnel or agent or advocate for the said hearing, on such short notice. Since, the companies have received the notice very recently, we on their behalf, seek adequate timeline to enable them collate all the supporting documents and information for the purpose of the hearing.”

Source: timesofindia.indiatimes
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Anand Gupta Editor - EQ Int'l Media Network