ICC seeks 30-day window after lockdown ends to meet obligations like tax filing, loan payments

The Indian Chamber of Commerce (ICC) on Wednesday sought government support for the energy sector in view of low demand, saying the power segment players should be given 30 days time after coronavirus lockdown is over to meet various obligations like tax filing, loan payment, etc.

In a statement, the ICC expressed concerns over the power producers' total outstanding dues owed by distribution firms which stand at Rs 88,311 crore in January 2020, saying it is a clear reflection of stress in the sector.

It said that the NLDC (National Load Dispatch Centre) data showed, the peak power demand met has come down by about 46 GW since March 20, which would further aggravate the ailing electricity generators.

The ICC feels the slump in power demand is unlikely to improve drastically till end of next month.

Besides, the government has asked the power generators to continue supplying power even if they don't pay for next three months.

Moreover, the penalty on late payment has been removed till June 30. In these circumstances, there would be pressure on power generating firms to ensure uninterrupted power supply 24X7, it noted.

The chamber has recommended that a window for the period of lock down and 30 days from the date of relaxation needs to be treated as force majeure and following categories to be covered under this period-tenders, loan repayment, tax filing, performance of various obligations by the developers/ contractors, achievement of schedules.

Solar and wind manufacturing industries, where the production will be impacted as the factories have shut down, need to be given time for recovery and this period is to be treated as zero period, it added.

The ICC suggested that wherever the energy sector can contribute in the critical care equipment like ventilators hospital equipment, etc, a special relief package can be given to the companies to meet the accelerated demand.

Capital grants can be sanctioned immediately. Lock down for the specific batteries, DC motor blower and controller manufactures can be lifted for their workforce to fight this war like situation, it added.

The chamber also suggested freight subsidy and expeditious booking by rail, road and air for those in the energy sector engaged in the essential services and medical supplies.

It said, "Bulk consumers like industries and commercial establishments may face a financial crunch in making timely payments of their electricity dues. This could be facilitated through overdraft/ loan facilities to them to make timely payments for electricity consumption."