Fiscal benefits available under Section 80-IA of the Income-Tax Act to power projects should be extended till 2015 instead of March 31, 2010, according to the Confederation of Indian Industry.
The extension was needed as the government's plans for the four ultra-mega power projects of 4,000 Mw would take shape after 2010, a CII release said.
Under Section 80-IA, companies are exempted from tax for 10 years. The CII said that fiscal benefits available to an undertaking engaged in the generation of power should be continued even after the shifting of the undertakings from one place to another.
To improve the status of transmission and distribution of power, the industry body has suggested that the benefits under Section 80IA should be extended to companies which have invested in modifying the existing network of state governments after acquiring them.
Currently, this benefit is available only to companies that are engaged in transmission and distribution of power and have laid down the new network lines after April, 1999.
CII has also recommended that infrastructure companies should be exempted from payment of Minimum Alternative Tax (MAT).
"While infrastructure companies are exempted from payment of any tax for a period of 10 years under Section 80-IA, the imposition of MAT has substantially diluted the incentive provided under this Section.
"This has resulted in a peculiar situation as the fiscal incentives bestowed by the Government on the selected sectors are being taken away in another form," the release said.
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