Date:20/02/2005 URL: http://www.thehindubusinessline.com/2005/02/20/stories/2005022000700500.htm

Back Wind energy body seeks new tax incentive system

Our Bureau

New Delhi , Feb. 19

THE Indian Wind Energy Association (InWEA) has sought a performance-based tax incentive system to attract greater investments in wind energy sector and make the electricity generated more affordable.

"The existing provision of income deduction benefit, available through accelerated depreciation regime, should be replaced by a performance-based incentive system," the InWEA Chairman, Mr Anil Kane, said.

Currently, the sector enjoys accelerated depreciation at the rate of 80 per cent. Tax incentives were linked to investments made by firms as part of their tax-saving plans.

Stating that this has failed to attract independent power producers, foreign direct investment and foreign institutional investors in the sector, Mr Kane proposed that indirect fiscal benefits could be provided to companies as tax credit certificates at a rate of Re 1 per unit for five years, subject to a cap of Rs 18 lakh per MW per year.