Higher and accelerated depreciation should be allowed for construction equipment at sites at 30 per cent so that the machinery can be written off in 10 years ( the current depreciation rate is 15 per cent).

Export of service: The levy of service tax on the tower testing services is based on place of performance. Even where services are rendered to a foreign customer and consideration is paid by customer in a foreign currency, the service tax is levied because such services are performed in India.

Services related to the export business should be encouraged and not be made liable to service tax which reduces the competitiveness of Indian industry. Amendments must be made to the Export of Service Rules so that all such services are treated as exports, irrespective of place of performance.

Excise duty exemption on steel/cement: At present, the excise duty exemption is available to the goods falling under Customs tariff heading 9801 and goods such as structural steel/cement used in the construction of mega/ultra mega power projects are not enlisted as exempted in the defined items of 9801 in terms of Central Excise Notification 6/2006. Exemption from payment of excise duty should be extended to steel and cement supplied for setting up of mega/ultra mega power projects for construction activities. This will help reduce the capital cost of projects for the developer, and the cost of electricity to the end customer.

R.D. Chandak, Managing Director

& CEO, KEC International