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GST on Preferential Location Charges

GST on Preferential Location Charges

In order to boost the economt, the Finance Minister Smt. Nirmala Sitharaman has come up with various measures which also includes relaxation in GST rates. It is noteworthy to mention here that the real estate sector is also facing various issues under GST. Treatment of ‘Preferential Location Charges’ is one such issue which is taken up and explained in the present article.

Understanding the term ‘Preferential Location Charges’

Before going into the details of the GST taxability of ‘Preferential Location Charges’, it is important to understand the term. ‘Preferential Location Charges’, basically, means an additional charge collected by the builder, from the buyer, for providing additional preference like providing park facing or pole facing flat or providing first floor or top floor flat or providing Vaastu specific flat etc.

Prevailing rate structure of GST in the construction sector

GST was chargeable at the rate of 12% (on value after excluding the value of the land at 1/3rd of the consideration) on residential dwelling, till 31st March 2019. The same was 8% in case of notified schemes like Pradhan Mantri Awas Yojana; Rajiv Awas Yojana etc.

From 1st April 2019, in order to boost the real estate sector, the GST rates were reduced to 5% (on value after excluding the value of the land at 1/3rd of the consideration) on residential apartments. However, GST rates in case of affordable housing were reduced to 1%. It is highly important here to note that the residential construction service, not classified anywhere else, would be subject to 18% GST.

Confusion prevailing in the market

When we go through the present matter, the same involves two types of services, one is construction service, and another is allied service in the form of a preferential location. Under GST, when there is a supply of more than one service, the same can be either classified as ‘Composite Supply’ or ‘Mixed Supply’.

In case of composite supply, the supply comprises of two or more services which are naturally bundled. Such services are supplied with each other in the ordinary course of business, and one of such is a principal supply. Whereas, in case of mixed supply, there is a combination of two or more services combined together for a single price. Such services can even be provided/supplied separately, and the combined services are not dependent on each other. It is a major confusion prevalent in the market that whether the construction + preferential location service be treated as ‘composite supply’, considering the construction service as the ‘principal supply’ or the same should be treated as ‘mixed supply’ considering that the same cannot be naturally bundled.

The confusion basically prevailed with regard to the taxability of preferential location charges since if the same is classified as ‘construction service’ abatement of the value of land is available, however, vice-versa, if not, the abatement benefit will not be available.

Advance Ruling Judgement

In M/s. Bengal Peerless Housing Development Company, the Authority for Advance Ruling (AAR) West Bengal has dealt with a similar matter. The AAR has held that the services of construction service and allied service (preferential location service) are provided in a bundle, wherein, construction service is the principal service. Accordingly, the entire sale consideration (including preferential location charges) shall be eligible for claiming 1/3rd abatement towards the value of the land.

The said judgment of Authority for Advance Ruling (AAR) West Bengal was challenged by the respective Commissionerate before the Appellate Authority for Advance Ruling (AAAR) West Bengal. After hearing both the sides, AAAR concluded that the builder is charging an additional amount in the form of Preferential Location Charges. Such preferential location charges are a separate service which has no association with the land and hence the abatement cannot be available in respect of such preferential location charges.

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Import Policy of Gold and Silver

Import Policy of Gold and Silver

The Ministry of Commerce and Industry, with its power conferred under the Section 3 of Foreign Trade (Development & Regulation) Act, 1992, has modified the Chapter 71 of ITC (HS), 2017 for the import of Gold and silver. The Amendment which came into effect from 18th December 2019 modified the items listed gold and silver items, other than the monetary Gold and silver, from ‘Free’ to ‘Restricted’.

Conditions in Chapter 71

A mixture containing precious metal and the intermetallic compound constitutes an alloy of precious metal with one precious metal elements holding the weight up to 2% of the alloy. The classification of precious metal alloys are done with the following rules:

  • An alloy comprising 2% or more, by weight, of platinum, is to be considered as an alloy of platinum.
  • An alloy with 2% or more weight of Gold without platinum or less than 2% weight of platinum is taken as an alloy of Gold.
  • An alloy of more than 2% weight of silver is considered as a silver alloy.

Revised Rule

The list of items and its related Amendment under Chapter 71 of ITC is as follows:

  • The Code Specifying the Item – 7106 1000 specifies the silver, plated with gold or platinum in the form of Powder.
  • Existing Import policy states a free import subjected to RBI Policy Conditions.
  • New Amendment rejects the import; however, it is authorised through recognised agencies of RBI and The Directorate General of Foreign Trade (DGFT).
  • The Code Specifying the Item – 7106 9100 specifies the silver, plated with Gold or platinum in the form of unwrought substance.

    • Existing Import policy states a free import subjected to RBI Policy Conditions.

      • New Amendment inhibits by:

        • The import of Gold is authorised through recognised agencies of RBI and DGFT.
        • Refineries can import the silver ore by obtaining a license with AU regulations.
  • The Code Specifying the Item – 7106 9210 specifies the silver, plated with Gold or platinum in the form of the semi-manufactured sheet, plates, tubes, strips and pipes.

    • Existing Import policy states a free import subjected to RBI Policy Conditions.
    • New Amendment rejects the import; however, it is authorised through recognised agencies of RBI and The Directorate General of Foreign Trade (DGFT).
  • The Code Specifying the Item – 7106 9290 specifies the silver, plated with Gold or platinum in the form of other products that are specified as earlier.
    • Existing Import policy states a free import subjected to RBI Policy Conditions.
    • New Amendment rejects the import; however, it is authorised through recognised agencies of RBI and The Directorate General of Foreign Trade (DGFT).
  • The Code Specifying the Item – 7108 1100 specifies the gold, plated with platinum in the form of Powder.

    • Existing Import policy states a free import subjected to RBI Policy Conditions.
    • New Amendment rejects the import; however, it is authorised through recognised agencies of RBI and The Directorate General of Foreign Trade (DGFT).
  • The Code Specifying the Item – 7108 1200 specifies the gold, plated with platinum in the form of unwrought substance.

    • Existing Import policy states a free import subjected to RBI Policy Conditions.
    • New Amendment inhibits by,
      • The import of Gold that is authorised through recognised agencies of RBI and DGFT.
      • Refineries can import the gold ore by obtaining a license with AU regulations.
  • The Code Specifying the Item – 7108 1300 specifies the gold, plated with platinum in the form of semi-manufactured.

    • Existing Import policy states a free import subjected to RBI Policy Conditions.
    • New Amendment rejects the import; however, it is authorised through recognised agencies of RBI and The Directorate General of Foreign Trade (DGFT).
  • The Code Specifying the Item – 7118 9000 specifies Other products like the base metals or Silver, Clad with Gold, not further worked, in the form of semi-manufactured.

    • Existing Import policy states a free import subjected to RBI Policy Conditions.
    • New Amendment rejects the import; however, it is authorised through recognised agencies of RBI and The Directorate General of Foreign Trade (DGFT).

The notification of revised import policy can be accessed below:

Revised-Gold-Silver-Import-Policy

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Composite Loan for MSMEs

Composite Loan for MSMEs

The composite loan scheme was initiated by the Ministry of Micro, Small & Medium Enterprises. This scheme was introduced to assist the Micro Small & Medium Enterprises units financially. The Single Financial Corporation provides the term loan and working capital loan to the MSME units to reduce the difficulties in starting production.

Eligibility Criteria

The scheme applies to the following:

  • The small enterprises of the manufacturing sector which includes cottage and village industrial units and artisans.
  • The micro-enterprises in the small enterprises of the manufacturing sector.
  • Micro or small enterprises of the service sector that take part in industrial activities only.

Documents Required

The required documents to avail the composite loan are:

  • The ownership details, educational details, personal details of the Owner or the Director.
  • Bank statement of the last 6 months.
  • GST number.
  • Udyog Aadhaar.
  • The statement of the Tax returns in an XML format.

Approved Banks for Loan

The following are the banks that can sanction the Composite loans to the Micro, Small & Medium Enterprises:

  • Bank of Baroda
  • Bank of Maharastra
  • Bank of India
  • Indian Bank
  • State Bank of India
  • Indian Overseas Bank
  • United Bank of India
  • Allahabad Bank
  • Andhra Bank
  • Punjab National Bank
  • Punjab & Sind Bank
  • Oriental Bank of Commerce
  • Vijaya Bank
  • Canara Bank
  • IDBI Bank
  • Corporation Bank
  • UCO Bank
  • Syndicate Bank
  • Union Bank

Debt Equity Ratio

The debt-equity ratio is 3:1 in the total venture of the money spent. The total venture will include the project cost and also the requirement of the working capital. This is fixed after checking about the amount of subsidy, investment or incentive that are given for the project.

Contribution of the Promoter

The contribution of the promoter under the composite loan scheme will be calculated after arriving at the debt-equity ratio 3:1.

Margin for the Term Loan

The Margin for the Term Loan is:

  • 25% for all the backward areas in the State.
  • 30% for the municipal limits and other areas of all the cities in the State.

Rate of Interest

Term Loans

  • The rate of interest charged for the new units in the backward area is 12.5% during the period of construction. The rate of interest is 13.5% for the remaining period.
  • The rate of interest for the units in the non-backward areas during the period of construction is 13.5%. The rate of interest for the remaining period is 14.5%.

Working Capital Loans

  • The rate of interest for all the loans up to an amount of Rs.2 lakhs during the construction period is 15%.
  • The rate of interest for all the loans exceeding the amount of Rs.2 lakhs during the construction period is 16.5%.

Period of Repayment

Working Capital Loans: The repayment period of the loan is up to 10 years for the working capital loan, which includes the moratorium period of 13 years.

Term Loans: The repayment period of the loan is up to 8 years and 6 months for the term loan, which includes the moratorium period of 18 months.

Security

The State Financial Corporation will first have a charge on the fixed assets and also the current assets. For the Working Capital Loan, the corporation may also ask for collateral security.

Benefits

  • The maximum amount that can be availed through composite loan is 25 lakhs.
  • The scheme is operated by financial institutions and banks.

Terms and Conditions

  • The working capital loan should be utilised within a year of the commencement of the production.
  • The Micro, Small & Medium Enterprises (MSME) unit should open an account with the bank. The working capital loan amount will be credited to the bank when the State Financial Corporation disburses the amount.
  • The MSME unit should use this account for all the transactions of the business, which includes all the payments and the receipts.
  • If the MSME unit approaches the bank for more working capital, then the MSME unit should have repaid the previous loans completely and the amount approved by the State Financial Corporation.
  • The MSME unit should provide a statement on the monthly stock which shows the inventory level position of the State Financial Corporation. If the unit fails to submit the monthly stock system, then the State Financial Corporation will recall the loan.

For more details, please contact:

Office of DC MSME
Development Commissioner (Micro, Small and Medium Enterprises),
A-Wing, 7th Floor, Nirman Bhavan, New Delhi 110011
Phone: 91-11-23063800, 23063802, 23063803, 23063804, 23063805, 23063806
Fax: 91-11-23062315
Web: www.dcmsme.gov.in

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Appointment of Internal Auditor

Appointment of Internal Auditor

As per Section 138 of the Companies Act, a certain class of companies are required to appoint an internal auditor for conducting internal audit which evaluates the function and activities of the company. The internal auditor can be the chartered accountant or a cost accountant, or such other professional as decided by the Board can be appointed as the Internal Auditor. In this article, we look at the requirement and procedure for the appointment of Internal Auditor in detail.

Eligibility Criteria for Appointment of Internal Auditor

Internal Auditors are professionals who are appointed by the concerned organisation for internal auditing of the company. According to the Section 138 of the companies Act, the internal auditor can be chartered accountant or a cost accountant, company secretary or such other professional decided by the Board of Directors of the company for the purpose of internal auditing.

The following are the companies are mandatorily required to appoint an internal auditor:

  • Any listed companies
  • Any unlisted public company having-
    • Paid-up share capital of Rs.50 crore or above during the preceding financial year.
    • Annual turnover of income of Rs.200 crores or above during the preceding financial year.
    • Outstanding loans or borrowings from either banks or public financial institutions that are exceeding Rs.100 crores or above during the preceding financial year.
    • Outstanding deposits of Rs.25 crores or above during the preceding financial year.
  • In case of any private companies having-
    • Annual turnover of income of Rs.200 crores or above during the preceding financial year.
    • Outstanding loans or borrowings from either banks or public financial institutions that are exceeding Rs.100 crores or above during the preceding financial year.

Duties and Responsibilities

An Internal auditor has the following duties and responsibilities in a company as listed below:

  • Evaluate risk management, corporate governance system, which is functioning as intended to meet the organisation goals.
  • Issue report of risk management and control deficiencies identified by the auditor. Also, the internal auditor provides recommendations in pursuit of improving the performance towards the organisation.
  • Evaluate risk exposures and security threat of the organisation information.
  • Evaluate programs relevant to regulatory compliance.
  • Evaluate the readiness of the organization in case of any interruption towards the business of the organization.
  • Provide workshops and seminars towards education and staff development
  • Plays a major role in maintaining the organization’s anti-fraud programs.

Note: The internal auditor should report to the audit committee. The audit committee or the board should, along with the internal auditor formulate the function, scope, periodicity and methodology of conducting the internal audit. Further, both the audit committee and the board are required to consider the efficiency of internal control systems and financial controls in the company.

Process for the appointment of Internal Auditor

An Internal Auditor could be appointed by passing a Board Resolution for this purpose. Before such an appointment, the Board members must endorse the terms and conditions of the appointment, and the Company Secretary must issue a Witten Consent for the role. If appointed, the details of the appointed Internal Auditor must be furnished in the register and submitted to the Registrar of Companies (ROC). These details are to be furnished and submitted within thirty days of such appointment in Form MGT-14 should be filed within thirty days of the passing of Board Resolution with the Consent Letter.

Format of the Board Resolution

“RESOLVED THAT pursuant to provisions of section 138 of Companies act 2013 read with rule 13 of the Companies (Accounts) Rules, 2014 and section 179 of the said Act read with rule 8 of the Companies (Meetings of board and its Powers) Rules, 2014 and other applicable provisions, if any, M/s ____________ (a firm of practising cost accountants/ charatered accountants/ company secretaries represented by Mr. ______________, having membership number ___________)/ Mr. ____________, Cost Accountant/ Chartered Accountant/ Company Secreatary/ ____________ (any other professional) having membershipnumber ___________ be and is hereby appointed as Internal Auditors of the company on the terms contained in the draft appointment letter containing scope, functioning, periodicity, and methodology of the audit placed before the Board.

RESOLVED FURTHER THAT Mr. _____________ Director (DIN: ___________) and Mr. __________ (DIN:__________) hereby severally authorized to take such steps and to do all such acts, deeds and things as may be necessary in this regard and to negotiate and fix the terms and conditions including the remuneration, to convey the acceptance of the terms, to sign the appointment letter and digitally signing and filing the necessary forms and returns, and generally to do all such acts, deeds, matters and things as may be necessary, proper, expedient or incidental fro giving effect to this resolution.”

Penalty for Non-Compliance

If a company or any other officer of the company, contravenes the provisions of this section, then the company or any officer of the company who is in default is liable for punishment with a penalty of up to Rs.10,000. In case of continuation of default in complying with the above section further fine of Rs.1,000 per day will be imposed.

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International Financial Reporting Standards

International Financial Reporting Standards

International Financial Reporting Standards (IFRS), are a set of standard rules to ensure consistency and transparency from a global perspective. These rules also provide that financial statements can be comparable around the world. Their main aim is to attain high-quality financial information on capital markets .

Mission Statement of IFRS Foundation

  • Transparency of financial reports or statements
  • Accountability of financial information in businesses
  • Economic efficiency by enabling investors to identify opportunities and risks in allotting capital

Reasons for Adopting Global Accounting Standards

  • To remove the differences of national accounting standards between one country and another, based on cost and complexity, and ultimately risk in making economic decisions.
  • To remove the complexity of calculations that might eventually lead to a different opinion on the performance of financial reports. For instance, an organisation may recognise profits under one set of national accounting standards and losses under another from different countries’ perspective.

Benefits of IFRS Standards

  • IFRS Standards ensure transparency by taking care of comparing financial information internationally and checking the standard of financial reports. In this way, investors and businesses can make educated economic decisions.
  • IFRS Standards prioritise accountability by minimising the information gap between the capital providers and the people to whom they have invested their finance.
  • IFRS also contribute to economic efficiency by helping investors in identifying opportunities and risks around the globe. This strategy enables improvement in capital allotment by investors and businesses.
  • IFRS use single-language accounting to remove confusion among businesses from different parts of the world. This strategy lowers the capital and reporting costs.

Key Strategies involved in Setting IFRS Standards

  • Public Board meetings broadcast from London branch office
  • Agenda papers that deal with the IASB’s deliberations
  • Discussion and decision summaries that are made available after meetings by ISAB
  • Comment letters received as feedback on IASB board meeting

Standards of Financial Reports of IFRS

Financial statements are reported in different forms. They are:

  • IFRS standards
  • IFRS for SME s Standard
  • IFRS translation
  • l Editorial corrections
  • IFRS taxonomy

IFRS Standards

This category deals with various segments, namely:

  • First-time Adoption of International Financial Reporting Standards
  • Share-based Payment
  • Business Combinations
  • Insurance Contracts
  • Non-current assets held for sale and discontinued operations
  • Exploration for and evaluation of mineral resources
  • Financial instruments: Disclosure
  • Operating segments
  • Financial Instruments
  • Consolidated Financial Statements
  • Joint Arrangements
  • Disclosure of Interests in Other Entities
  • Fair Value Measurement
  • Regulatory Deferral Accounts
  • Revenue from Contracts with Customers
  • Leases
  • Insurance Contracts

IFRS for SMEs Standard

  • This category is meant for small companies.
  • It focuses on details pertaining to the needs of lenders, creditors and users of SME financial reports dealing on cash flows, liquidity and solvency.

IFRS Translation

  • Translation is another factor which is important in interpreting the financial report in different languages.
  • It focuses on developing high-quality global accounting standards for use across the globe.

Editorial Corrections

  • Editorial corrections make a revision on minor inaccuracies, wrong spellings, wrong numbering, and grammatical mistakes.

IFRS Taxonomy

  • The IFRS Taxonomy improves communication between people preparing financial reports and people who use financial statements that are in accordance with IFRS Standards.
  • People preparing financial reports can implement IFRS Taxonomy’s elements to include or deal with the required disclosures. This makes it easier for the users of the report.

Accounting Standard Requirements

There is a wide range of activities covered by IFRS, and there is a certain practice that all businesses need to follow.

  • Statement of Financial Position: This point deals with the balance sheets. IFRS determines the reporting of balance sheets.
  • Statement of Comprehensive Income: This statement can be in the form of a complete financial statement as a whole, or it can break down into a clear profit and loss financial statement, and an explanation of other income, including property and equipment.
  • Statement of Changes in Equity: This point is so-called a statement of retained earnings, and this documents the company’s change in revenues or profit for the given financial period.
  • Statement of Cash Flow: This report provides a roundup of the company’s financial transactions in a given period, breaking down cash flow into Operations, Investment and Finance.

Composition and Roles of IFRS Bodies

In terms of the structure of the IFRS Foundation, there are 3 main tiers. They are:

  • International Accounting Standards Board
  • IFRS Trustees
  • IFRS Monitoring Board

Apart from those above 3 primary constituents of IFRS, there are auxiliary groups as well known as consultative bodies of IFRS. They are:

  • Standing consultative groups
  • Transition resource groups (TRGs)
  • Project consultative groups
  • Closed consultative groups

Registration with IFRS foundation

There are 2 ways that copyright licensing for adoption can be done. These include:

Single-step adoption

Two ways of single-step adoption include:

  1. If reports are to be published as per the IRFS requirements (including translation) in the official gazette or websites as per the legislation, this requires adoption agreement.
  2. In some jurisdictions/legislation, reporting standards can be adopted by referring to IFRS standards. However, there are no reports produced or translated according to IRFS standards. In such a case, the adoption contract is not needed. However, it is up to the jurisdiction to decide on the access of IRFS requirements. A contract will be required with IFRS to translate or access the material of IRFS.

Convergence

Convergence facilitates the adoption of IRFS standards during the transitional phase in an applied jurisdiction. This phase is to ensure that accounting standards are of high quality and accepted globally. For that, a license is needed to use IRFS materials in local standards while converging with IFRS standards. However, IRFS copyright materials will have to be incorporated within the local standards.

Registration fee

An annual fee needs to be paid based on GDP for:

  • Adoption agreement to reproduce the text of IFRS requirements in a particular jurisdiction/legislation
  • Licence to create local standards agreement in order to reproduce the text of IFRS Standards within a local standard

For further details on fee structure, interested jurisdiction/party can correspond with

https://www.ifrs.org/use-around-the-world/adoption-and-copyright/#content

Users of IFRS Standards

Users or participants implementing IFRS standards, from different parts of the world, can be categorised based on:

  • Profiled jurisdictions require the use of IFRS Standards = 144 countries
  • G20 economies which require IFRS Standards = 15 countries
  • Profiled jurisdictions require or permit the use of the IFRS for SMEs Standard = 86 countries

Contact information

Address:

IFRS Foundation Asia-Oceania office
Otemachi Financial City South Tower 5F
1-9-7, Otemachi, Chiyoda-ku,
Tokyo 100-0004, Japan

and

Makoto Takahashi, Director
Noriaki Shimazaki, Advisor

IFRS Foundation
Columbus Building
7 Westferry Circus
Canary Wharf
London
E14 4HD
UK
Phone: +44(0)2072466410

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Development of Decentralised Solar Power Plants

Development of Decentralised Solar Power Plants

The environment and climatic condition in India have an abundant potential in generating Solar Power. Renewable Energy has further made electricity generation cost much cheaper after the price slash in the establishment and maintenance of the Solar PV Panels . The Ministry of New and Renewable Energy (MNRE), Government of India has been working on improving the process of power procurement and reducing the Transmission and Distribution (T&D) losses. The Ministry has formulated and issued a specific set of guidelines to develop and promote Decentralised Solar Power Plants in the country, especially in the rural areas.

Objectives

The guidelines were drafted and implemented by the Ministry to achieve the following objectives:

  • To encourage solar energy power production in all nearby sub-stations
  • To connect more than 40,000 33/11 KV sub-stations in the rural areas and generate more electricity
  • To enhance the performance of electrical machinery that are connected to the rural feeders
  • To make sure that the cheap, uninterrupted and reliable Solar Power is available in every corner of the Nation

Eligibility

The Ministry approves the solar power plants which achieve the following criteria:

  • Any Entities or company or cooperatives are eligible to set up the Solar Power Plants
  • The Government approves for those to set-up the Solar Power Plants provided with 20% of the estimated project cost
  • Plants with the capacity of more than 2MW and are linked to the substations that have obtained incentives under the PM-KUSUM component and are entirely depleted

Under these guidelines, the Solar Power Plants are liable for the sale of power via open access generated. Power trading agencies can float bids for the establishment of Solar Power Plants and sell the generated power to DISCOMS on an agreed amount or open access customers on a trading margin capped at Rs.0.07/KW.

Implementation of the Guidelines

Power Distribution Companies (DISCOMs) are assigned with the responsibility of allotting the solar power capacity to developers to develop the Decentralised Solar Power Plants.

  • DISCOMs purchases power from the decentralised solar power plants
  • That functions with the efficiency of more than 2 megawatts (MW)
  • That is connected to distribution sub-stations of rating 66/11 KV and higher
  • With a unit of 2 MW capacity that is linked to distribution sub-stations of any DISCOM of rating 33/11 KV and below

Infrastructure Arrangements

DISCOMs procures electricity from the Decentralised Solar Power Plants for the tenure of 25 years and at the following conditions:

  • At a cost specified and agreed by the appropriate State Electricity Regulatory Commission.
  • Identifies competitors with the initiation of the bidding process.
  • Documents and executes the Power Purchase Agreements (PPAs) towards the Developers.
  • Guarantees a ‘must run’ status on Solar Power Plants and compensates the developers in case of failures.
  • The developers are liberal in procuring their land for setting up and developing the Solar Power Plants with the concerning infrastructure.
  • DISCOMs procure the land and permit the connectivity to developers by installing 11KV lines.
  • DISCOM propose tenders for providing lands to developers, either paying the entire cost to entice lower tariff  or on taken on a lease basis.
  • The Solar Power Plants are required to be commissioned within nine months from the date of issuance of letter of award (LoA) if DISCOM provides the land and connectivity.
  • The Solar Power Plants are required to be commissioned within nine months from the date of issuance of Letter of Award (LoA) if the land and connectivity are owned by other entities.

Required Documents

The SPG should provide a Bank Guarantee to DISCOMS in order to clear the selection process. The Bank Guarantee should include:

  • EoI and an Earnest Money Deposit (EMD) of Rs.1 Lakh per MW
  • Performance Bank Guarantee (PBG) of Rs.5 Lakhs/MW within 30 days from the issuance of LoA. If the land is not of SPG’s responsibility and DISCOM is offering it, then it may demand a higher PBG amount

Role of Stakeholders

The implementation partners and their responsibilities included as per the guidelines are as follows:

  1. The Ministry of New and Renewable Energy is the responsible authority in making the design and quality control orders that are most suitable for solar modules, inverters, BoS and other equipment updating on a regular basis.
  2. DISCOMs are the official agencies to choose the Solar Power Generator (SPG) and decide on the solar power capacity that can be linked to a distribution sub-station. They release the LoA and sign Power Purchase Agreement (PPA) with the chosen SPGs. They offer linkages between the sub-stations and provide infrastructure facilities to the chosen SPGs. They check on the working status of the SPGs and offers regular payments to them.
  3. State Nodal Agency (SNA) are the middlemen between the DISCOMs and other State agencies in obtaining the required approval and project development actions and support the SPG.
  4. Solar Power Generators (SPGs) is the responsible body to install the plant and carry out the norms mentioned under the PPA.

Other Conditions

The other conditions that are being laid out under the guidelines for the consideration of SPGs are as follows:

  • SPGs should obtain all the clearances required for the establishment and functioning of the plant from the State Government through the Single Window Clearance System .
  • SPGs should install the Performance Monitoring equipment to gauge the performance of the plant and submit the measured data to DISCOM on a regular basis through its online portal for the tenure period of PPA.
  • Generally, the selected SPGs should commence their commissioning within 12 months from the date of release of LoA. But in case of acquiring land from the DISCOMs, the SPGs should commission the solar power plant within nine months from the date of release of LoA.
  • DISCOMs holds the right to procure electricity from the commissioned SPP once the pact is sealed through PPA. If the SPG fails to meet the demands, DISCOM shall compensate its loss by encashing the PBG in the below-listed mode.
  • For the delay up to two months, DISCOMs would charge on the PBG on a daily basis and equal to the non-commissioned capacity.
  • For the delay of over two months, then the PPA capacity would be lessened and commissioned at the end of 11 or 13th month from the date of release of LoA.
  • If SPGs failed to generate minimum electricity during the PPA, then the DISCOMS may demand the SPGs to compensate its loss as mentioned in PPA.

Contact Details

J K Jethani
Scientist–’E’,
Block- 14, CGO Complex,
Lodhi Road, New Delhi -110003.
Fax: + 91-11-24361298
Phone: 24365666
Email: Jethani.jk@nic.in

The guidelines for Development of Decentralised Solar Power Plants can be accessed below:

Final-Guidelines-for-Development-of-Decentralised-Solar-Power-Plants

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Companies Act – Compensation for Loss of Office

Companies Act – Compensation for Loss of Office

Companies may decide to pay compensation at the time of discontinuing the services of Key Managerial Personnel (KMP). The Companies Act provides restrictions for companies which are paying compensation to KMP at the time of termination of service. KMP refers to the individuals who have overall responsibility for the functioning of the company. KMP is also responsible for the company’s compliance with the provisions of the Companies Act, 2013. KMP includes the Chief Executive Officer (CEO), Company Secretary, Chief Financial Officer (CFO), Managing Director (MD), Whole-time Director (WtD) and General Manager (GM) of a company. Appointment of KMP is mandatory when the assessee is a listed company. Listed companies are companies whose outstanding paid-up capital is traded in the National Stock Exchange (NSE), Bombay Stock Exchange (BSE) or Calcutta Stock Exchange (CSE). Public companies which have a paid-up share capital of ten crore rupees or more should also mandatorily appoint KMP.

The Government of India (GoI) observed that companies were using the funds of shareholders to pay excessive compensation to KMP. To address the issue, the GoI introduced restrictions on the maximum amount of compensation payable. The restriction is part of an overall initiative by the GoI to prevent misuse of shareholders’ funds. The misuse takes place when public limited companies pay abnormally large amounts as compensation to KMPs. By introducing restrictions on the payment of unusually high compensation to KMP, the GoI ensured that funds invested by the public are efficiently utilised.

Rules for Payment of Compensation

The rules which should be followed by companies that make payment of compensation for loss of office are mentioned in Section 202 of the Companies Act 2013. The rules are explained below:

Eligibility for Compensation

The Companies Act permits compensation for loss of office to be paid to the MD, WtD and GM of a company. Other directors are not eligible to receive compensation. The compensation should be paid as consideration for the retirement of the KMP from the service of the company. However, the retirement should not have been voluntarily made by the KMP. The company should have decided to remove the KMP on account of business-related reasons.

Compensation for Voluntary Resignation

The company may be placed in circumstances of economic difficulty. In such instances, the company may decide to terminate the services of those KMP which are drawing high remuneration. Thus, the initiative to discontinue the services of the KMP has originated from the company. Hence, in such circumstances, the company can pay compensation. However, the company should ensure that it avoids paying compensation over and above the amount determined by the terms of the appointment. Also, the compensation paid to the KMP should not be disproportionately excessive in comparison with the duties and responsibilities undertaken.

Applicability to Reappointed Individuals

The KMP may resign from the service as a result of reconstruction or reorganisation of the company. The reconstruction or reorganisation may take place on account of amalgamation or demerger. The KMP who is working in an organisation may be appointed as a KMP again. The subsequent appointment may be granted in the company, which results from the reconstruction or reorganisation. In such circumstances, the company should not pay compensation.

Liquidation Caused by Negligence

The company may be liquidated voluntarily or by order of the National Company Law Tribunal (NCLT). Circumstances for liquidation are generally caused since the company is undergoing economic hardship. However, liquidation can also be caused by the actions of the officers of the company. The officers in the employment of the company could have committed an act of negligence or error, thus making liquidation necessary. In such circumstances, the KMP is not eligible to receive any compensation. Also, compensation should not be paid concerning the transfer of any property belonging to the company.

Discontinuation of Business

A company may be in the process of discontinuing the business. The assets of the company after deducting the expenses of liquidation may not be sufficient to repay the capital to the shareholders. The insufficiency may arise at the time of termination of the services of the KMP. It may also occur twelve months following the date of termination. In such circumstances, the KMP is not eligible to receive any compensation.

Compensation Limit

The maximum period for compensation should be remaining years of service or three years, whichever is shorter. The maximum per month compensation should be a three-year average remuneration. The average should be calculated by considering the salary drawn during three years preceding the date on which the termination was implemented.

Compensation in Disqualification Cases

When specified disqualification circumstances are attracted, the company should remove the KMP from service mandatorily. In such circumstances, compensation should not be paid. The specified disqualification circumstances are the following:

  • When a court has determined that the individual is of unsound mind
  • When insolvency proceedings are pending against the individual
  • When the individual has been convicted by a court and sentenced to more than six months’ imprisonment
  • When the individual has not paid share call-money even after it has been outstanding for more than six months
  • When the individual has caused the company to enter into related party transactions without informing the shareholders about the nature of interest in the transaction
  • When Form DIR 3 was not filed at the time of appointment of the individual as a GM, MD or WtD in the company
  • When the company has made a default in repayment of public deposits or debentures
  • When the company has made a default in payment of the interest on public deposits or debentures
  • When the company has made a default in a loan-related payment which should be made to nationalised banks or public financial institutions towards interest or principal
  • When the company has made a default in payment of Income Tax, GST or any other statutory obligation
  • When outstanding dues to the employees the company have not been paid
  • When the company has not paid a dividend on preference shares on the due date
  • When the company, being a listed entity, has violated the listing agreements entered into with the NSE, BSE or CSE
  • When the company has failed to redeem preference shares on the due date

Compensation for Transfer of Controlling Interest

  • At a general body meeting of the company, an offer may be made for purchasing the shares of the company. The purchase may result in the availability of controlling interest for the buyer. A controlling interest means the ownership of more than thirty-three percentage in the paid-up capital of a company.
  • An offer of shares made at a general body meeting could result in the transfer of controlling interest to the buyer of the shares. The KMP may receive compensation in connection with the agreement for the transfer. The compensation received in such cases will be governed in the same manner as compensation paid for loss of office.
  • Further, the payment of compensation should also be approved by the shareholders in a general body meeting. To indicate approval, the shareholders should pass a resolution. The resolution should indicate that shareholders have no objection to the payment of compensation to the KMP.
  • The resolution passed by the shareholders for approving the payment should contain the following details:
    • Name and Directors’ Identification Number (DIN) of the KMP
    • The amount which is proposed to be sanctioned
    • Particulars of the event concerning which compensation has become payable and justification for the amount paid
    • Board meeting details for the board meeting which recommended that compensation should be paid
    • The reference number of the Form MGT 14 which was submitted to the Registrar of Companies (RoC) for filing the minutes of the board meeting
    • The fact of whether any of the directors refrained from participating in the proceedings of the meeting although physically present, together with the reason for non-participation
    • In case a director in the company has any financial interest in the resolution, the reference number of the Form MBP 1 which was submitted to the RoC for filing the details of the financial interest
  • The payment may have been made before the shareholders passed the resolution. In such cases, the KMP should hold the money in trust on behalf of the company. In case the resolution is rejected by the shareholders, the funds should be returned. In case the KMP fails to make the repayment within seventy-five days, a fine of one lakh rupees should be paid. The penalty will also be payable in case a default is made in complying with any other legal requirement which applies to the payment of compensation.

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India Design Mark

India Design Mark

India Design Mark is the design recognition from the Indian Government through India Design Council. Through India Design Council, any global enterprise, MSME or cottage industry can apply for India Design Mark for their products. In this article, we look at the application procedure for obtaining India Design Mark in detail.

Objectives of India Design Mark

The objectives of the India Design Mark are:

  • To recognise good design by following a transparent evaluation process of recognition.
  • To augment the competitiveness of industrial output for export markets and domestic consumption.
  • To act as a reference for purchase decision as it indicates good design in terms of product quality, functionality and usability.
  • To promote the value of design in the industry by promoting India design.
  • To undertake awareness programs in Intellectual Property Rights and provide a workshop on intellectual property management.

Benefits of India Design Mark

The benefits of the India Design Mark are listed below:

  • India Design Mark provides quality and excellence of the product through an independent and third-party assessment
  • India Design Mark provides a reputation for the company in both trust and assurance.
  • India Design Mark provides businesses with strong differentiation from their competitors.
  • India Design Mark signifies excellence in form, function, quality, safety, sustainability and innovation and communicates that the product is usable, durable, aesthetically appealing and socially responsible.
  • India Design Mark provides international export worthiness of the product.
  • India Design Mark is excellent for new products launched in the market.

Eligibility Criteria for the Product

The following are the conditions to be satisfied by the product opting for India Design Mark:

  • The product should satisfy any two of the three requirements like Made in India, Designed in India or Sold in India.
  • The product should be in the market at the time of application.
  • The product must be a complete product.
  • The product should have been introduced as the new product in the market during the course of 1st January 2017 and 16th July 2019.

Ineligible Entries

  • Any entries in the prototyping stage.
  • Any entries under the litigation for violation of patent, trademarks, design mark or any intellectual property related provisions.
  • Any entries that are copies of other products available in foreign or Indian markets.

Other Conditions

  • An application can be made by the manufacturer or brand owner of the company or by the designer.
  • An applicant is allowed to submit any number of entries in any category.
  • The India Design Mark will be issued in the name of the brand owner company along with the design credit.
  • In case of product family where many product elements from single product offering or product with same basic design attributes but with minor changes in such case single application are entertained.

Categories of Entry

  • Lifestyle Products
  • Home and Office Appliances
  • Industrial Equipment
  • Furniture and Equipment
  • Automotive and Transportation
  • Software and Digital Products

Application Procedure for India Design Mark

To apply for India Design Mark, follow the steps given below:

Visit India Design Council portal

Step 1: The applicant needs to register an online account using the India Design Council portal.

India Design Mark-Image 1
India Design Mark-Image 1

Step 2: Upon registration, a confirmation mail will be received on the registered email address.

Step 3: Now, by clicking on the link in the confirmation mail, you can access the online account throughout the application process.

Complete the Application

Step 4: Complete the application process by start filing the application form.

Step 5: Choose the appropriate entry to review categories and sub-categories of the entries that are essential for the evaluation process.

Upload Entry Images

Step 6: After filling the application form, upload the six different images of the respective entry.

Step 7: Then, the final submission has to be made on or before the specified date.

Final Submission of Application

Step 8: Before making the final submission, the application can be edited to make any changes in the application form.

Step 9: The application should be submitted any at the time prior to the last date of the application.

Payment of Fee

Step 10: On final submission of the application, an invoice for payment of application fee will be generated.

Step 11: Provide the payment towards the application fee, and the payment once made is not refundable under any circumstances.

Note: If your entry is qualified at the end of stage-1, the physical product can be sent the stage-2 assessment by remitting the payment for stage-2 assessment fee for declaration of result.

Application Fee

The application fee for the India Design Mark is scheduled below:

Stage-1

S.No Category 1st Stage Assessment fees early-bird entry 1st stage Assessment Fees
1. Cottage industry Rs.3000 Rs.5000
2. Micro, small and medium enterprises Rs.8000 Rs.10000
3. Medium and large industry Rs.12000 Rs.15000

Note: Apart from the above-scheduled fee, GST at the rate of 18% is included additionally.

S.No Category 2nd Stage Assessment fees Exhibition Fees
1. Cottage industry Rs.10,000 Rs.3,000
2. Micro, small and medium enterprises Rs.20,000 Rs.3,000
3. Medium and large industry Rs.30,000 Rs.3,000

Note: Apart from the above-scheduled fee, GST at the rate of 18% is included additionally.

India Design Mark Annual Usage Fee

S.No Retail price of the Product India Design Mark usage fee
1. Less than Rs.10,000 Rs.10,000
2. From Rs.10,000 to Rs.1,00,000 Rs.50,000
3. From Rs.1,00,000 or above Rs.1,00,000

 

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Telangana State Industrial Policy

Telangana State Industrial Policy

The Government of Telangana has formulated the new Industrial Policy, which aims at providing sustainable industrial development and to create gainful employment opportunities in the state of Telangana. In this article, we look at the Telangana State Industrial Policy in detail.

Objectives

The following are the primary objectives of the Telangana State Industrial Policy:

  • The new Telangana State Industrial Policy strives to provide a framework which stabilizes and make existing industries more competitive.
  • It also attracts new international and national investments in the industrial sector.
  • The policy aims at core manufacturing sectors, with the creation of employment for urban and rural people by adding value to the existing skills emphasised at all stages.
  • The most significant outcome of the policy will be the production of high-quality goods at the most competitive rates with high global recognition.
  • It also creates online and help-desk grievance redressal system where the entrepreneurs are encouraged to report instances of corruption or any delays in delivering timely tasks by the Telangana State Government departments. 

Focus Sectors

The following are the sectors that will be supported under the Telangana Industrial Policy .

Life Sciences industry sector which includes the bulk drugs, formulations, vaccines, nutraceuticals, biologicals, incubation centres, R&D facilities and medical equipment.

  • Information Technology Hardware sectors.
  • Precision Engineering including aviation, aerospace and defence sectors.
  • Food processing sectors 
  • Automobile and Auto components sector
  • Textiles industry sectors
  • Chemical and Plastic industry sectors
  • FMCG and Domestic Appliances 
  • Engineering and Capital Goods which includes castings, foundry and Ferroalloys and other metallurgical industry sectors.
  • Gems and Jewellery industry sectors.
  • Waste Management and Green Technologies industry sectors
  • Renewable Energy and Solar Parks sectors
  • Mineral-based and wood-based Industry sectors
  • Transportation/Logistic Hub/Inland Port/Container Depot sectors

Special Focus on SMEs and Micro Industries

The new Telangana State Industrial Policy creates special provisions for the SME and Micro sectors, that are as follows:

  • Adequate number of small plots in the Industrial parks for the SMEs; developed sheds for the Micro units 
  • Special fund for addressing Incipient Sickness 
  • Special fund for anti-pirating assistance 
  • Special fund for IP registrations assistance
  • Special fund for the technology transfer and modernization to the MSME sector
  • Reimbursement of land conversion charges for the units in own land, subject to an upper limit 
  • Marketing assistance to participate in the national and international trade shows and buyer-seller meets
  • Consultant panel to respond to the MSME entrepreneur need
  •  Separate State Level Bankers Committee (SLBC) for the industries, particularly SMEs 
  • Decentralized procedure for the grant of licences and permissions to the Microenterprises at the level of Industrial Promotion Officers (IPOs) 

Industrial Incentives

The State Government proposed to encourage the process of industrialization by providing various kinds of incentives to the entrepreneurs. The Telangana State Government also ensures an entrepreneur-friendly and graft-free regime of disbursing the incentives. The Government guarantees that the incentives will be released on the fixed time, and direct to the bank account of the entrepreneurs. There will be a transparent application system online, with the minimum human interface. There will be enhanced incentive packages for the Scheduled Castes (SC), Scheduled tribes (ST), Physically Handicapped, and women entrepreneurs. The megaprojects with an investment of over Rs. 200 crores in the plant and machinery or employment above 1000 persons will get tailor-made incentives in addition to the standard large category industry incentives

Assistance to Woman Entrepreneurs

The Telangana State Government will support women entrepreneurs in a huge way where the 9 districts of the state will have one or more industrial sectors mainly for women. The organizations working for the women entrepreneurs such as COWE, ALEAP and FICCIFLO will be invited to join with the government to identify and train women entrepreneurs to get their project proposals developed and link them to financial sectors and handhold and monitor the progress of their projects. The Government will facilitate the number of entrepreneurs to emerge from the socially deprived categories such as SCs, STs, BCs and Minorities. 

Special Support for SC/ST entrepreneurs

The framework of the state of Telangana is based on the premise of social justice, the new Telangana State Industrial Policy will create a number of additional support measures that would increase the entrepreneurship among the SCs/STs. This policy will be implemented under the banner of TS-PRIDE – Telangana State Program for the Rapid Incubation of the Dalit Entrepreneurs and some of these initiatives under T-PRIDE that are as follows: 

  • A special direct funding program for the financing SC/ST entrepreneurs to utilize the money that is available under the respective Sub-Plans. 
  • The payment of margin money on behalf of the SC/ST entrepreneurs by the government 
  • Preferential allotment of plots in Industrial Parks 
  • The state departmental procurement policy in line with the GOI SME procurement policy (20%)
  • Intensive Entrepreneur and Skill Development programmes 
  • Supplier diversity opportunities in large industries 
  • Subsidy eligibility if funded by the CRISIL Rated NBFCs
  • No negative list
  • Interest subsidy for the service sector units (except the transport sector) 
  • State-supported CGTMSE-type scheme for the SC/ST entrepreneurs
  • The companies like the Dalit India Chamber of Commerce and Industry (DICCI) will participate in planning, implementing and monitoring the special programmes for SCs/STs 
  • Representation in any district and state-level committees.

Incentive Scheme

The Telangana State Government will be providing incentives to the entrepreneurs in the below areas under its incentive scheme entitled “T-IDEA” (Telangana State Industrial Development and Entrepreneur Advancement)

  • Power cost reimbursement 
  • Investment subsidy
  • VAT reimbursement 
  • Interest subsidy 
  • Stamp duty reimbursement 
  • Land cost rebate 
  • Land conversion cost 
  • Seed capital for 1st generation entrepreneur 
  • Training and skill development cost reimbursement 
  • Quality and patent support 
  • Clean production measures
  • Reimbursement of infrastructure development costs

Central Government Incentives

According to Section 94 (1) of the Andhra Pradesh Reorganization Act 2014, the Central Government would take appropriate fiscal measures, that includes the offer of tax incentives, to the successor states, to support industrialisation and economic growth in the States.

  • 100% central excise benefit for 5 years
  • 100% income tax benefit for 5 years and 30% for the next 5 years
  • Other investment subsidy benefits 

The Government will provide these benefits to the entrepreneurs once they get notified by the Government of India. 

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Rajasthan Wind and Hybrid Energy Policy 2019

Rajasthan Wind and Hybrid Energy Policy 2019

To create clean and green energy, the State of Rajasthan implemented Rajasthan Wind and Hybrid Energy Policy 2019. The policy was implemented to increase energy security and equity, reduce carbon emissions and pollution. The policy aims to provide support to the stakeholders by promoting Wind and Hybrid energy and protecting the interests of the consumer. The Wind and Hybrid Energy Policy would support to achieve the target of generating 175 GW Renewable Energy by the year 2022. The policy is monitored by the Department of Energy, Rajasthan. The policy is active from 18th December 2019.

Vision

  • To strengthen the transmission and distribution networks for the state of Rajasthan.
  • Provide support to increase the manufacturing of wind energy equipment.
  • Promote projects related to wind and hybrid energy and provide support to create storage systems.
  • Promote hybridisation to enhance wind and solar technologies to meet the challenges of the grid security
  • Create a stable utilisation of the land and transmission systems

Objectives

  • Increase Renewable Energy in the state of Rajasthan to meet the Renewable Purchase Obligation (RPO) RPO requirement.
  • Provide support to increase infrastructure and distribution network.
  • Create a platform to increase the use of power by obtaining a maximum share of renewables.
  • Utilise the unutilised land for creating Wind Energy Hubs.
  • Create a platform to attract investors and developers to set up  RE generation capacity for the state of Rajasthan and other states.
  • Provide investment opportunities for SMEs and MSMEs.
  • Create a framework supporting Wind-Solar Hybrid system for increased use of infrastructure and land.
  • Implement facilities to improve the technologies to generate more wind and solar power.
  • Create a platform to develop Wind and Solar projects from states other than Rajasthan

Targets by the Policy

The policy aims to accomplish the following targets:

  • To produce 2000 MW of wind power capacity for RPO by 2024-25.
  • Distribution Companies (DISCOMs) or Rajasthan Urjaq Vikas Nigam Limited (RUVNL) shall produce beyond the RPO requirement for commercial purposes.
  • The state shall produce 2000 MW for DISCOMs within and outside Rajasthan.

Tariff

  • The tariff shall be adopted through the bidding process. The process shall be framed by the Rajasthan Electricity Regulatory Commission (RERC).
  • The state shall promote to facilitate third party investors through contract demand.
  • 5% of the target from the RPO shall be produced by the DISCOMs. The tariff shall be set by the bidding process.
  • The state shall promote third party sale to promote Wind power projects with storage systems.
  • The minimum rates of the energy capacity of an Energy Storage System (ES) shall be calculated as X/2MWh.
  • The RPO for the DISCOMs shall be monitored by the RERC

Agreement of Power Purchase

The following is the mode of the power purchase agreement between the Developer or Power Producer and Procurer of the power:

  • Projects sanctioned for wind power plants under clause 8.1 shall be executed between the DISCOMs or RUVNL and successful bidders or power producers
  • For projects related to clause 8.2, 8.3 and 9.2, the developer or the power producer shall create a Wheeling and Banking Agreement with the DISCOMs.
  • If RVPN is used in the Wheeling and Banking Agreement, the Power Producer or the developer shall create a separate Transmission Agreement with RVPN.
  • Power Purchase Agreements (PPA) shall be allowed to assign partially or fully under the following conditions:
    • After the project is completed and the set up is connected to the grid
    • After the consent from RREC, RVPN or DISCOMs
    • After payment of Rs.2 lakh per application to RREC (GST applicable)
  • If the project is financed by any financial institution or lender, the name can be included in the PPA on request by the Developer or Power Producer.

Registration of the Wind Power Projects

  • As per the policy, all the projects installed in the state of Rajasthan should be registered with RREC.
  • Any wind energy projects registered under the 2012 policy shall be treated as registered in 2019 policy. The registration number shall remain the same.
  • The Developer or the Power Producer shall provide the registration fee to the state agency for projects created under the RE (Non-Solar) certificate mechanism.
  • The Developer or the Power Producer can transfer the registered facility by acquiring approval from the RREC. The Developer or the Power Producer shall also pay an amount same as 50% of the registration amount.
  • To participate in the bidding process, the policy does not require registration from the Developer or Power Producer.
  • Upon registration with the RREC, the Developer or Power Producer shall receive a certificate to initiate projects
  • Any wind power plants or projects that do not undergo the registration process with the RREC shall be discontinued from the grid.

Registration Fee 2019

The following is the non-refundable registration fee for the Wind Power Projects:

S. No.

Capacity

Fee

1

For Project Capacity < 100MW Rs.50,000 per MW

2

For Project Capacity ≥

100MW

Rs.50 Lakh per project

The following is the non-refundable registration fee for the Hybrid Power Projects:

S. No.

Capacity

Fee

1

For Project Capacity ≤

10 MW

Rs.50,000 per MW

2

For Project Capacity >

10 MW and ≤50 MW

Rs.5 Lakh per project

3

For Project Capacity > 50 MW and ≤ 100 MW Rs.10 Lakh per project

4

For Project Capacity > 100 MW Rs.30 Lakh per project

Clearance of Wind Power Projects

The following criteria shall be evaluated and examined by the State Level Screening Committee for project clearance:

  • Detailed Project Report
  • Financial Capability of the power producer
  • Availability of land
  • Power evacuation system for the proposed project
  • Original Document of PPA stating the third party sale for the power exchange

Security Deposit

  • After the clearance of the project by the State Level Screening Committee, the Developer or the Power Producer should provide a security deposit of Rs.5 lakh per MW. The security deposit shall be provided in DD/RTGS within one month without any interest.
  • If paid within three months, the concerned party shall pay with an interest of 9% per annum.
  • If the Developer or the Power Producer fails to provide the security deposit within the stipulated time, the in-principle clearance shall be cancelled without prior notice.
  • After providing the security deposit, the Developer or the Power Producer should apply for the final approval within six months. Failing to apply within the stipulated time the in-principle clearance shall be cancelled without prior notice.
  • If the Developer or the Power Producer needs to withdraw 75% of the amount shall be refunded. The refund applies only to the projects registered under the 2019 policy.

Manufacturing Wind Energy Equipment

The following concessions shall be provided by the State of Rajasthan to promote manufacturing facilities:

  • SMEs and MSMEs can apply
  • 50% concessional rate in a land allotment in industrial areas
  • 100% exemption on stamp duty
  • Exemption of electricity duty for ten years
  • 90% Investment subsidy for energy equipment manufacturers for seven years

To register Private Limited Company or Partnership, click here

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