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Home News Power Sector News Delhi Corporation proposes 5% tax on power supplied or sold by discoms

Delhi Corporation proposes 5% tax on power supplied or sold by discoms

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New DelhiThe Municipal Corporation of Delhi has put a premium on uninterrupted power supply in the national Capital. In a bid to bolster its revenues, the civic body has now proposed imposition of five per cent electricity usage tax against total power supplied to or sold by discoms.Against an average demand of 4,000 MW, Delhi produces less than 1,000 MW of power and the rest is sourced or purchased from companies outside the State. Notably, the discoms — NDPL and BSES — have power purchase agreements with several companies and the purported move, said officials, may lead to further increase in power tariff in Delhi. The civic body already charges electricity tax on total revenue collection.

“We will charge five per cent tax on total power supplied or sold in Delhi by power companies. This will be in addition to the electricity tax already being charged by us from the discoms on revenue collection from Delhiites against power consumption. The proposed tax will be on trading of power,” said MCD Standing Committee Chairman Ram Kishan Singhal while finalising the Budget estimates for 2010-11.

He said there are several private companies which intend to or are already supplying electricity to Delhi. “It has been decided that all properties of discoms and the Delhi Jal Board will be considered as commercial properties for the calculation of property tax as these organisations are charging commercial rates on their services being provided to the MCD. Till date, they gave institutional tax,” he added. The proposal will be taken up and approved by the MCD House before its implementation.

When asked, NDPL and BSES accepted the fact that they were purchasing power from many small power generating companies apart from the big ones like the National Thermal Power Corporation. “To meet heavy demand for power during summer season and also in view of the upcoming Commonwealth Games, we have tied up with many power companies for power supply. This includes GS from Chhattisgarh, Rampur Sugar of UP, Haldia Power, Jindals, Rana Sugar and AB Sugar. The proposed tax will affect the rates,” said a senior NDPL official.

He said there are some companies which generate power from waste materials and taxing them would be against the Government’s initiative to promote and give rebate to Green power generation. Delhi’s peak power demand last summer went as high as 4,404 MW. The discoms were then asked by the Government to purchase power from any possible source to fulfil the needs.

The civic body has said that a tax at the rate of Rs 10 per kilowatt per generator used for commercial purposes by shopping mall owners and multiplex owners will also be charged. Most of the shopkeepers, mall owners and those running different other commercial establishments use heavy duty generators to make up for power shortage but now Rs 10 per kilowatt of power used will be charged on them. Big malls and multiplexes use up to 10 MW of power annually.

Source- Pioneer

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