Press Information Bureau

Government of India

Ministry of Commerce & Industry

26-March-2012 16:09 IST

Setting up Power Plant in SEZs

The developer of a SEZ can transfer the surplus of the power generated in their power generating stand alone or captive plants, in excess of the requirement of the SEZ, to Domestic Tariff Areas (DTA). However, such a developer shall have to make an application for sale of surplus power to DTA to the Development Commissioner and will have to pay duty as applicable on import of such power. The Development Commissioner concerned may examine the request for sale of surplus power to DTA in consultation with the appropriate agencies as may be required under the Electricity Act, 2003 and rules made there under wherever considered necessary.

In terms of S.O. 528(E) dated 3rd March 2010, the Developer of a Special Economic Zone notified under Sec 4(1) of the SEZ Act, 2005 shall be deemed to be a licensee for the purpose of clause (b) of Sec 14 of the Electricity Act, 2003 i.e. to distribute electricity as a distribution licensee.

In respect of power supplied from processing area to constituents in non-processing area or from processing area / non processing area to DTA, it should be at such a price as agreed to between the relevant regulator and the developer. For such clearance, duty shall be leviable at such rate as may be notified as customs tariff by the Department of Revenue in consultation with the Ministry of Power /prescribed power sector regulatory agencies and the Ministry of Commerce, as prescribed in Section 30 of SEZ Act, 2005.

. These guidelines, inter-alia, include the following provisions:- Constituents to whom power can be supplied, Licensing for distribution of power, Determination of tariff, Levy of duty on power supplied to DTA and applicability of other Acts, Rules and Resolutions issued by the Ministry of Power from time to time.

This information was given by Shri Jyotiradiya M. Scindia, Minister of State for Commerce & Industry in written reply to a question in Lok Sabha today.

DS/GK

Distribution licensee status enables SEZ developers to sell surplus power to domestic areas subject to duty and regulator approval. SEZ developers may transfer surplus electricity to Domestic Tariff Areas subject to application to the Development Commissioner, consultation with agencies under the Electricity Act, 2003, and payment of duty as applicable on import of such power. A developer of a notified SEZ is deemed to be a distribution licensee for distribution purposes. Pricing for supplies to non-processing areas or DTA must be agreed with the relevant regulator, and duty rates will be notified in the customs tariff after consultation with power-sector regulators and the Ministry of Commerce.