Indian-Fertilizer-Scenario - Department of Fertilizers

department of fertilizers ministry of chemicals & fertilizers 129
(f) borrowings for project cost would be considered at the actual rate of interest subject to the maximum of
SbI PlR.
(g) The Special Fixed Cost would be fixed for 5 years period and would be paid from the date of commercial
production after conversion up to the end of 5 years and shall be withdrawn at the end of 5 years. The Special
Fixed Cost shall be paid only for production till 100% of the re-assessed capacity.
(h) The project cost considered as special additional fixed cost would not be considered/recognized as capital
addition for the purpose of Net Fixed asset as well as for depreciation during current pricing and future
pricing, if any.
(i) Special Fixed Cost Component and the energy Savings (as per ‘c’ above) to be paid for first five years
post conversion based on the production upto 100% of the reassessed capacity is towards reimbursement
of capital cost of the project and is a subsidy in the nature covered under explanation 10 to section
43(1) of Income Tax act 1961.
(j) The cost adjustment to the extent of old plant is not used for urea production will also be made in the
final project cost. Suitable valuation methodology will be adopted by the Department of Fertilizers in
this regard. The team constituted as at (b) above shall assist the Department in assessing the valuation
of the old plant.
3. Monthly progress/flash reports of the project in the prescribed formats should be submitted to this
Department.
4. This issue is with the concurrence of the Internal Finance Division of this Department conveyed vide their Dy.
No. 275/SS&Fa/10, dated 5-02-2010.
Copy to:-
Thanking you,
(i) Secretary, Department of expenditure.
(ii) Secretary, Planning Commission.
(iii) Secretary, Department of agriculture and Cooperation.
(iv) Director (Finance), D/o Fertilizers.
Yours faithfully,
( Deepak Singhal )
Joint Secretary(F&P)
Tele : 23381294