The Commerce Ministry has conveyed to the Power Ministry that the deemed export benefits can be enjoyed by mega power plants if the international competitive bids norms are followed either at the stage power selling or engineering contracts.
The issue came up for review at a recent meeting in the Commerce Ministry which was also attended by officials of the Power Ministry.
It was clarified after the meeting that deemed export benefits are available on supply of goods to mega power projects if power procurement from such projects has been tied up through international competitive bids (ICBs).
Alternatively, the ICB procedure should be followed at the Engineering and Procurement Contract stage by these projects, a Directorate General of Foreign Trade circular said.
Deemed exports relate to transactions under which goods supplied to users or projects do not leave the country and payments are received either in Indian currency or in foreign exchange.
The benefits include exemption from excise duty and duty drawbacks to suppliers.
The sops are available to either an inter-state thermal plant exceeding 1000 Mw capacity or a hydel plant of 500 Mw and above.