Tata Power and Reliance Infra are misrepresenting tax charge, says AAP

The Aam Aadmi Party has accused power companies Tata Power and Reliance Infrastructure of misrepresenting tax costs, resulting in an additional burden of ₹434 crore for consumers in the Mumbai region.

Addressing the media on Wednesday, AAP’s State convenor, Anjali Damania, said both the companies have been paying corporate tax at the rate of 18 per cent.

But when they approached the Maharashtra Electricity Regulatory Commission (MERC) for fixing the tariff, they declared their tax burden at 33 per cent. The difference is passed on to consumers as tariff hike, she said.

Damania alleged that from 2009-10 to 2011-12, Tata Power overstated its taxes by ₹218 crore, and Reliance Infrastructure by ₹216 crore.

Due to this additional tax claim, the MERC had said power companies should give concessions to consumers.

The matter was even taken up to the Appellate Tribunal of Electricity (AET).

However, the AET sent the case back to the MERC. Stating that the MERC must resolve the issue by approaching the Supreme Court, Damania said MERC should ensure that the ₹434 crore is recovered from the companies with penal interest.

AAP member Satish Jain also alleged that Reliance Power had got huge sops from the Maharashtra Government for setting up a power plant in Nagpur.

The plant was ostensibly designed to provide power to industries in the Vidarbha region. However, today, all the power from that plant is being supplied to the Mumbai region.

The 300 MW plant is located in the Maharashtra Industrial Development Corporation (MIDC) area of Nagpur. It is being run by Vidarbha Industries Power Ltd (VIPL), a special purpose vehicle of Reliance Power.

Jain said about 300 acres was acquired for the plant by MIDC at ₹4 lakh an acre and later that land was transferred to VIPL.

On completion of the plant in 2012, VPIL contended that there was no demand for power from the Vidarbha region and went ahead to sign a long-term power purchase agreement with Reliance Infra’s distribution unit in Mumbai. “This is how resources for the public good get diverted for purely commercial purposes,” alleged Jain.