Government has come out with fresh norms for setting up of power plants in special economic zones, stipulating that generation units could be set up only in the non-processing area of SEZs and there will be no fiscal benefits towards maintenance.
As per the modified norms, the power plants which are set up in IT/ITeS zones that require uninterrupted power supply at stable frequency will be entitled to fiscal incentives for setting up and maintenance of generating units. “A power plant, including non-conventional energy power plant, to be set up by developer/co-developer in an SEZ as part of infrastructure facility will be in the non-processing area of SEZ only and will be entitled to fiscal benefits only for its initial setting up and no fiscal benefit would be admissible for its operation and maintenance,” the commerce ministry guidelines for power generation, transmission and distribution in SEZs said. Such a power plant can supply power to domestic tariff area (DTA) after meeting the power requirement of the SEZ subject to payment of Customs duty. It is also stipulated that setting up of captive power plant, including non-conventional energy, could be permitted in ‘processing area as a unit’.