State Cabinet to waive VAT, octroi, CST charges for Dabhol revival

Tax relief for procurement of equipment, expansion of LNG terminal

Maharashtra cabinet on Tuesday gave its approval for a slew of concessions to be offered for the revival of the 1,967 MW Dabhol power project from November 1. As announced by the union power minister Piyush Goyal last week, the state government would provide relief to the Ratnagiri Gas & Power Pvt Ltd (RGPPL) in the recovery of value added tax (VAT), Octroi Duty, Entry Tax and Central Sales Tax for the procurement of various equipment required for the power project and also for the expansion of LNG terminal.

The state cabinet’s approval was necessary, as its undertaking MSEB Holding Company holds 13.50 per cent equity in RGPPL. Incidentally, the state cabinet has also decided not to draw any power after the revival of Dabhol project, due to surplus availability of power in Maharashtra.

The state cabinet also gave its consent for the RGPPL’s move to supply 500 MW of power to the Indian Railways at the per unit tariff of Rs 4.70. Of the 500 MW, Railways will use 250 MW in Maharashtra, 50 MW in Gujarat, 100 MW in Jharkhand and 100 MW in West Bengal for its operations. The state transmission utility, MahaTransco, has supported the Indian Railway’s plea before Central Electricity Regulatory Commission for open access and connectivity.

As per the release issued by the Chief Minister’s Office, the state government would give directive to the Maharashtra Electricity Regulatory Commission for the waiver in transmission charges to RGPPL.

Further, the state cabinet also decided that MSEB Holding Company will not increase its stake in RGPPL, but it would have the first right, if other equity holders, including NTPC, GAIL and Financial Institutions, plan to sell their equity. The state cabinet also decided to appeal to the Centre for an early resolution of dispute between MahaVitaran and RGPPL, especially with regard to tariff and other related issues. MahaVitaran has already terminated its PPA with RGPPL in January this year and the latter has kept it in abeyance.