AEC wants 10-year tax rebate for nuclear power plants beyond 2010

NEW DELHI: Nuclear power plants that come into operation after 2010 may still be able to enjoy ten-year tax holiday if a recommendation by the Atomic Energy Commission (AEC) is accepted by the government.

AEC has sought tax relief on income from power generation business to be extended to companies that start nuclear power generation before March 31, 2020. As per the current provision in the Income-Tax Act, income arising from power generation is exempt from tax for 10 years if the units begin operation between April 1, 1993 and March 31, 2010.

A senior government official, who did not wish to named, said: ���None of the units that will be set up for generation of nuclear power will be able to start power generation before March 31, 2010 and hence won���t be able to claim tax exemption under the current norms.��� He said the tax exemption was very crucial to scale up nuclear power production to 20,000 mw by 2020.

With India signing nuclear deals with more countries, it may be able to scale up nuclear power production to 60,000 mw by 2030.

Government estimates show that nuclear energy accounts for 2.9% of India���s installed capacity of 146,753 mw at the end of October 2008. Cost of nuclear power generation would be as competitive as power generated from thermal plants using coal, another government official said. Moreover, power can become costly if generated by a station situated more than 800 kilometres away from a coal line.

The income-tax holiday will make investments in nuclear power generation business more attractive for private sector players. Domestic and foreign companies are exploring ways to benefit from nuclear commerce in India. A nuclear trade mission lead by the US-India Business Council and the Nuclear Energy Institute, is visiting India this week to explore opportunities available in nuclear commerce with India.

The mission includes over 51 senior executives representing around 34 of the world���s leading commercial nuclear companies including GE-Hitachi Nuclear Energy Inc, The Shaw Group, Westinghouse, Black & Veatch, Bechtel Nuclear, CH2M Hill, Babcock &Wilcox, Uranium One, Thorium Power and USEC, among others.