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New Delhi, Feb 9: Private power producers have sought customs duty relief on imported coal for thermal plants, saying the levy is “increasing the cost of electricity generation and burdening the common man”.

At present, coal imports attract 2 percent Basic Customs Duty (BCD) and Countervailing Duty (CVD) each. As part of its budget expectations, the Association of Power Producers’ (APP) has asked for exemption in BCD and CVD on imported coal. APP represents as many as 20 private power companies.

Stating that private firms are forced to import the dry fuel as domestic coal is insufficient to meet their requirement, APP said, “Since there is no duty on electricity on the output side, any duty imposed on procurement of coal would be a cost for power companies.”

“BCD and CVD should be nil rated for coal imported for the usage in thermal power plants.”

APP has said that the present duty structure is “unintentionally” increasing the cost of power generation and impacting the common man. The private power producers have also sought exemption of customs duty on fly ash for a power plant set up in SEZ.

“Fly ash has no value and many times the project developers have to pay for disposal of the fly ash while also complying with terms of MoEF for disposal of fly ash. There is no rationale on charging duty on such an item,” APP said.

Meanwhile, Anil Chaudhry, Country President and Managing Director, Schneider Electric India said, “The growth of the Indian economy, to a great extent, will depend on the nation’s openness and adaptability to energy security. To achieve this it will require priority sector lending status under RBI guidelines.”