Budget 2013: Long term tax holiday should be given to solar industry, says FICCI

NEW DELHI: In a bid to strengthen financial conditions of the solar industry, FICCI solar energy task force has advocated that the government should look to provide long term tax holiday in budget 2013 for projects commencing in the sector.

Solar industry being an industry of strategic significance not only for energy security but also for improving energy access requires economic and financial support from the government, FICCI noted.

The industry body said that long term tax holiday for solar energy projects would act as a catalyst for the growth and development of the sector. FICCI is of the view that tax holiday of 10 years on solar power projects should also be announced under section 80 I(A) of Income Tax act.

At present, under Section 80 (I) (A), the projects are required to be completed within the same financial year. Therefore, effectively it leaves less than a year for an entity to complete the project to avail these benefits. It turns out to be uncertain for the developers who wish to venture into a long term project, explained FICCI.

In addition, companies engaged in the business of generating power from grid connected solar PV projects should be exempted from payment of Minimum Alternate Tax under Section 115JB of the Income Tax Act. A special incentive package to upgrade the facilities for substituting costly raw materials with cost effective raw materials should be introduced, FICCI said.