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Power producers see tariffs coming down under GST regime

Press Trust of India  |  New Delhi 

Thermal power tariffs are likely to come down due to lower rate on coal under the Good and Service regime which is expected to be rolled out from July 1, 2017.

The rate has been finalised at 5 per cent on coal as against the current incidence of 11.69 per cent at the Council meeting held in today.


"The coal-based thermal power rates of different power plants may see a downward trends under the new regime as lower rate of 5 per cent proposed on it," an official of an independent power producer said.

However, the official said that the quantum or proportion of reduction in the tariff could not be ascertained at this point of time because there is multiple layer of levies and charges on coal as well as on electricity.

At present the average price of power of the state-run power giant Ltd is about Rs 3.20 per unit. Its different plants have different rates of tariff based on fixed cost, levies and other charges.

A senior official of a public sector firm explained, "The power tariff would definitely come down but we don't know to what extend. The new plants have higher rate of tariff because of fixed cost but the older plants rates are lower due negligible fixed cost."

The official further said, "Coal is the main input for a thermal power plant and even a percentage point reduction in would mean a lot for power producers. But how much power distributing companies would pass it on to consumer would be seen once the new regime is rolled out.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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