Wind plant components exempt from excise duty

In a bid to attract investments into the wind energy sector, the government has exempted parts and components used in wind- operated electricity generators - tower, rotor and blades - from excise duty.

A circular issued by the Central Board of Excise and Customs says the move is taken to "reduce litigation and improve ease of doing business in the important sector of non-conventional energy".

The first circular in this regard was issued in 2012, after which several references were received regarding the eligibility of the components. The recent circular clarified on the parts and components of the wind turbine generator, which fall in the exempted category.
 

"These (wind) companies have been facing an issue of payment of excise duty on the various parts that go into making a wind energy station without any method of availing a credit or set-off on the same. This will go a long way in driving more investment in companies engaged in generating energy through renewable energy sources and will be welcomed by the energy sector," said M S Mani, senior director, Deloitte India.

Of the ambitious targets set by the National Democratic Alliance government for renewable energy - 1.75 gigawatt (Gw) by 2022 - around 60 Gw would be wind energy. In the renewable mix of 37,000 megawatt (Mw), wind power currently contributes the highest with an installed capacity of 24,000 Mw.

Following the decision to exempt excise duty, shares of wind turbine company Suzlon Energy were up 2.51 per cent on the BSE. The stock of Gujarat-based Inox Wind, too, surged 1.55 per cent while that of Orient Green Power rose 9.23 per cent.