Power generators operating in special economic zones (SEZs) are going for some tough time, as the government has withdrawn duty benefits extended to operation and maintenance of power plants set up by developers within SEZs.
In February 2009, the Commerce Ministry had allowed SEZ developers to avail duty benefits only at the initial stage of setting up of a power plant in a non-processing area and not for operational and maintenance of the plants, but in 2012, it had extended duty benefits for operation and maintenance of power plants in SEZs also.
Now the ministry in a notification on guidelines for power generation in SEZs said the directive issued in March 2012 was being withdrawn and the position of February 2009 was being restored. The notification came into effect from April 1.
However, it was said that notification will impact developers of SEZs and not the units which are engaged in generation and trading of power in these zones and the developer, who has set up a power plant in processing areas of SEZ and is availing duty benefit, will now have to demarcate that area as non-processing area.
