Solar industry seeks VAT exemption on equipment, incentives for projects

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More incentives for solar parks, a sovereign fund to back dollar-denominated solar tariffs, solar equipment exempted from value added tax (VAT) as well as stability in wind power policies are some of the key demands of the renewable energy industry as Finance Minister Arun Jaitley prepares to present the Union Budget for 2016-17.Solar parks should be treated at par with special economic zones (SEZs) and minimum alternate tax (MAT) exemption may be provided to power projects within solar parks,” said Ficci’s pre-budget memorandum. Agreed Rahul Shah, CEO, Tata PowerBSE -0.09 % Renewable Energy: “We should have greater commitment to solar parks.Many felt a dollar-based solar tariff with a sovereign fund supporting it would make a big difference to foreign investors worried about the depreciating rupee. With declining solar tariffs already squeezing developers’ margins, a further fall in the value of the rupee — which slid below 68 to the US dollar last month — could well impact investor interest, unless such a step is taken.

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