News Detail

• COIMBATORE: Industry captains in Coimbatore have requested the state government to withdraw a tax that will be levied from April 1 on companies producing power on their own through diesel generators. The state government's decision to impose the tax - 10 paise per unit -- has come as a shocker to HT consumers, who are already forced to work only 48 hours in an entire week.

• In a letter to the chief minister, Codissia president M Kandhaswami has said that tax on generating electricity has added to the misfortunes of the industry, which has already been crippled by power cuts. "The industry has been asking for a discount on VAT on diesel and other subsidies so that they can run their machines on gen sets, thus providing some relief to the grid. However, without encouraging the industry to run on captive power, this step of TANGEDCO to charge tax on generating electricity will discourage industries," said Mahendra Ramdass, president, Tamil Nadu Electricity Consumers Association.

• The industry is reeling under outages and power holidays have only added to the trouble. There is a shortfall of 4000MW across the state and companies are unable to source power from private third parties as the grid is incapable of transmitting this power. In these circumstances, the tax on electricity generation has only added insult to injury.

• The tax on electricity generation has existed for a while but was suspended during the power crisis in the state. Now, the tax will be collected by TANGEDCO instead of the electrical inspectorate. Meanwhile, TANGEDCO has asked all consumers to install energy meters and other equipment required to check the units run on gen sets before March 31.

• The industry are already suffering from high cost of running gen set and have to manage the work force in very few working days. Consequently, there has been a huge loss in the number of orders and has led the customers to move away from Tamil Nadu.

• "The decision to pay tax for generating electricity from gensets would cripple the industries further," said RR Ranghanathen, president, Southern India Engineering Manufactures Association. "Ever since the power cuts, we have been demanding subsidies on diesel to operate the industries. This would have helped TANGEDCO to reduce the pressure on the grid. However, the present announcement has not only come as a shock but would also hit the industries severely," he added.

• "Many small industries are now getting the gensets despite the rates and the higher costs that they would have to incur. But the announcement would surely hit many entrepreneurs, who are planning to purchase the gensets to save their business. Government should support the industry by providing some concession and subsidies when increasing the rates," said A Suresh Kumar, secretary, Small Scale Industrial Entrepreneurs Association. He pointed out that industries incur huge costs in operating the units on gensets. "If we use gensets, per unit costs between Rs 15 to Rs 20; thereby, we spend Rs 5,000 a day to run the unit," said K Ramesh, who manufacturing automobiles parts in Ganapathy. "At a time like this, when we have several orders to finish and deliver, the government's announcement would lead to severe loss for the industries," he complained.

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