Letter for Exemption in Electricity Duty

Sample / Template Request letter for Exemption in Duty on Account of Sick Unit

ABC Corp/EDE/2012-13/125
October 26, 2012 
Hon’ble Minister of Energy

Sub: Exemption of Electricity Duty

Dear Sir,

Most respectfully, on behalf of ABC Trading Ltd (ABCL), we beg to put forth the following few long outstanding grievances of the Company for your kind consideration and necessary orders.

ABCL is a Future Group of Company promoted by Bharti Airtel & India Mart with the objective of setting up a Unit to manufacture HR Coil in the district of Khapoli.

In spite of various obstacles faced by the Company in course of execution, it was completed in October, 1975.  However, due to continued unsatisfactory progress of the Company, a reference was made to the BIFR as a potentially sick company under Section 23 of SICA 1985.  This case was registered as ___/____.  After considering the submission of the Company under Section 19(2) of the SICA, 1985, it was declared as a sick industrial unit in 2001 and a package containing Draft Rehabilitation Scheme was sanctioned and the SBI was designated as Monitoring Agency.  After hearing at length, the BIFR issued a sanctioned scheme (SS-01) with effect from 01.04.2004 after reviewing various provisions of the DRS Scheme.

Under the provision of the sanctioned scheme, the Government of Maharashtra was required to consider grant of following concessions during the period of rehabilitation.

a)           Exemption of Electricity Duty on consumption of power for a period of 10 years from the date of sanction of the Scheme (@ Rs. 125.44 lakh per annum).
b)           To exempt from payment of Electricity Duty on self-generation for a period of ten years from the date of sanction of the scheme (@ Rs. 15.45 lakh per annum).
c)           To extend repayment of existing interest free Electricity Duty loan (Rs. 50.10 lakh) for a period of eight years.

It is relevant to mention that as a law abiding consumer, we have already paid Rs. 2,00,00,000.00 towards the Electricity Duty on consumption of power for the period from 2/2003 to 2/2008.  This amount needs to be refunded by the State Government to comply with the provisions of the sanctioned scheme of the BIFR.  Further ED leviable on self-generation is also required to be exempted.  Further Electricity Duty due for the period from 11/01 to 4/2004 is to be treated as interest free Electricity Duty loan.  The period of payment for the above amount shall be extended to eight years.

However, the State Government has ignored the aforesaid directions of the BIFR and non-implementation of the aforesaid direction of the BIFR, the Company has been deprived of the legitimate concession granted by the BIFR.  However, by order dated 05.12.2007, the BIFR has issued further directions as under:

The unimplemented provisions SS-01 if any, would be implemented by the concerned agencies and would be monitored by the Company.”

It is learnt that implementation of the provisions of SS-01 relating to exemption of Electricity Duty was considered by the State Government.  But, it was deferred due to constraint of resources at that point of time.  However, the Company did not press the matter to co-operate with the Govt. in the time of financial constraints.   Since there is no time limit within which the unimplemented provisions of SS-01 are to be implemented, it would be highly appreciated if the aspect of implementing the scheme is again reconsidered by the Government.  It is worthwhile to mention that the Company started production after 21st Aug, 1975.  Further the power of exemption as available under the Electricity Act, 1961 can be well exercised by the Government at this point of time, keeping in view of the improved financial conditions of the State Exchequer and the fact that the Company started functioning after 21.08.1975.

Thanking you,

Yours faithfully



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