Tata Power Litigation Update: APTEL Remands Property Tax & Income Tax Issues to MERC
APTEL has ruled on Tata Power's appeal against MERC's MYT Order. APTEL found MERC incorrectly disallowed property tax and income tax, remanding the issues to MERC. The potential claim is ₹268 crore, to be finalized after MERC's order.
The litigation involves a significant claim of approximately ₹268 crore, which, if fully realized, could have a material impact on the company's financials. However, the final outcome is contingent on further proceedings with MERC.
The APTEL ruling remands the case back to MERC, which means the final outcome and financial implications are still uncertain. While the ruling is in favor of Tata Power regarding the disallowance of property tax and income tax, the quantum of claims is yet to be finalized.
Tata Power Company Limited has disclosed an update regarding a litigation matter before the Appellate Tribunal for Electricity (APTEL). The APTEL has delivered its judgment on an appeal filed by the company challenging the Maharashtra Electricity Regulatory Commission (MERC) Multi-Year Tariff (MYT) Order dated August 8, 2016.
APTEL ruled that MERC had incorrectly disallowed Property Tax as an Uncontrollable O&M expense and disallowed Income Tax for the period FY 2007-08 to FY 2013-14. Consequently, APTEL has remanded these matters back to MERC, directing the commission to pass orders on these issues expeditiously.
The quantum of claims is approximately ₹268 crore. However, the final amount will be determined upon the completion of the remand proceedings and the issuance of MERC's order. The company has stated that there are no expected financial implications due to compensation or penalty at this stage.
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