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The Eighth Schedule
(See
the First and Third Schedules)
Determination of
Cost of Production of Electricity at Generating Stations
I. For the purposes of the First and Third Schedules, the
cost of production of electricity at a generating station
shall be ascertained by calculating and taking into account
the following costs, and allowances in respect of the year
of account, namely :-
(a) sums expended for fuel, oil, water and stores consumed,
for salaries and wages, and any contribution by the licensee
for pensions, provident fund, superannuation and insurance
of 1[officers and other employees], for repairs
and maintenance and for renewals not chargeable to capital
account :
(b) sums paid in respect of the station for insurance and
as rents, rates and taxes 2[including all taxes
payable on income and profits];
(c) the proportion of management and general establishment
charges properly attributable to the station;
(d) any other expenses on revenue account properly attributable
to the station;
(e) 3[interest on the depreciated cost of the station
shown in the books of the undertaking an properly attributable
to the station (whether defrayed out of capital or revenue)
and interest on working capital properly attributable to the
station and the production of electricity therein] :
Provided that for the purpose of ascertaining the principal
on which interest is payable within the meaning of this clause,
there shall be left out of account any part of principal on
which interest is payable out of capital;
(f) an allowance for depreciation of an amount determined
in respect of the station in accordance with the provisions
of paragraph VI of the Sixth Schedule.
II. 4[For the purposes of clause (e) of paragraph
I --
(i) “depreciated cost of the station” means original cost
thereof as determined in accordance with the provisions of
sub-paragraph (6) of paragraph XVII of the Sixth Schedule
less and the amount written off in respect of intangible assets
thereof in the books of the undertaking before or after the
commencement of this Act;
(ii) the rate of interest shall be --]
(a) on such part of the principal on which interest is payable
with in the meaning of the said clause as has been advanced
on loan by the Board plus one-half of one per centum per annum
on the loan in the year of account;
(b) on the balance of the said principal --
(i) where the licensee owning the station is a local authority
the average rate payable in the year of account on the money
raised by that authority for the purposes of the station;
(ii) in any other case, 1*[the Reserve Bank rate
ruling at the beginning of that year plus two per centum]
1 Subs, by
Act.23 of 1978, s.25, for “officer and servants”.
2 Subs. by Act. 101 of 1956, s..29, for “(including super-tax
payable by the licensee as company but excluding other taxes
on profits)”
3 Subs. by s.29, ibid., for certain words.
4 Subs. by Act.30 of 1966, s.,22, for certain words (w.e.f.
1-4-1966).
1* Subs. by Act.101 of 1956, s. 29, s.,29, for “5 per centum
per annum”
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