Indian-Fertilizer-Scenario - Department of Fertilizers
Indian-Fertilizer-Scenario - Department of Fertilizers
Indian-Fertilizer-Scenario - Department of Fertilizers
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118 indian fertilizer scenario 2010<br />
14. notiFiCAtion on PoLiCY FoR ConVeRsion oF Fo/LsHs<br />
Urea UNiTS-ameNDmeNT<br />
No. 12014/1/2008-FPP<br />
Government <strong>of</strong> India<br />
Ministry <strong>of</strong> Chemicals & <strong>Fertilizer</strong>s<br />
<strong>Department</strong> <strong>of</strong> <strong>Fertilizer</strong>s<br />
Shastri bhawan,New Delhi<br />
Dated the 8th February 2010<br />
to<br />
CMd/Md<br />
NFl, GNVFC<br />
Subject: Policy for Conversion <strong>of</strong> FO/lSHS urea units – amendment <strong>of</strong><br />
sir<br />
I am directed to refer to <strong>Department</strong> <strong>of</strong> <strong>Fertilizer</strong>s letter No. 12014/1/ 2008-FPP dated 6th March 2009<br />
regarding Policy for Conversion <strong>of</strong> FO/lSHS urea units. The above policy provides for reimbursement for the<br />
project cost through special fixed cost and energy savings to be linked with the production and to be paid in the<br />
span <strong>of</strong> five years post commissioning <strong>of</strong> the plant.<br />
2. It is clarified that the amount <strong>of</strong> energy savings and special fixed cost component to be paid based on<br />
production in a span <strong>of</strong> five years post commissioning is towards reimbursement <strong>of</strong> capital cost <strong>of</strong> the project<br />
and is a capital subsidy in the nature covered under explanation 10 to Section 43(1) <strong>of</strong> Income Tax act 1961.<br />
Thus, no income tax is liable on the above reimbursement.<br />
3. The Special fixed component shall therefore not include Income tax on Special Fixed Cost (after netting <strong>of</strong>f<br />
with respect to allowable project depreciation under Income Tax, Revenue from special additional fixed cost<br />
and interest charge allowed).<br />
4. The provision <strong>of</strong> the policy for Conversion <strong>of</strong> FO/lSHS Urea units dated 6th March 2009 stand amended as<br />
above.<br />
5. This issue is with the concurrence <strong>of</strong> the Internal Finance Division <strong>of</strong> this <strong>Department</strong> conveyed vide their Dy.<br />
No. 275/SS&Fa/10, dated 5-02-2010.<br />
Yours faithfully,<br />
( Deepak Singhal )<br />
Joint Secretary(F&P)<br />
Tele : 23381294<br />
Copy to:<br />
1. Secretaries <strong>of</strong> the <strong>Department</strong> <strong>of</strong> expenditure, <strong>Department</strong> <strong>of</strong> Revenue, <strong>Department</strong> <strong>of</strong> economic affairs,<br />
<strong>Department</strong> <strong>of</strong> agriculture & Cooperation, <strong>Department</strong> <strong>of</strong> Commerce, <strong>Department</strong> <strong>of</strong> Industrial Policy &<br />
Promotion, Planning Commission.<br />
2. Director General, <strong>Fertilizer</strong> association <strong>of</strong> India, 10, Shaheed Jit Singh Marg, New Delhi. 110067.<br />
3. executive Director, FICC<br />
4. all Officers/Sections in the <strong>Department</strong> <strong>of</strong> <strong>Fertilizer</strong>s and <strong>of</strong>fice <strong>of</strong> FICC.<br />
Copy also to:<br />
(I) Smt. Vini Mahajan, Joint Secretary, Prime Minister’s Office, South block, New Delhi.
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