The union ministry of chemicals and fertilisers has sought goods and service tax (GST) on the purchase of goods and concession on electricity duty on power generation from the Odisha government to improve the internal rate of return of the 1.27 million tonne capacity Talcher Fertiliser plant.

The project is being revived with an investment of Rs 8,000 crore by a consortium comprising FCI, GAIL, Rashtriya Chemicals and Fertilisers Ltd and Coal India Ltd. The plant will produce urea.

This would be the first fertiliser plant in the country to operate on coal gasification technology. Approximately 25 megawatts (MW) of power is required for running the project.

Apart from GST exemption and concession of electricity duty, the Union government has also sought the state government's support for stamp duty waiver on sub-leasing of land, removal of encroachment over the existing water supply and railway lines and rehabilitation of the revenue village situated within the North Arkhapala block allocated for the project.

The Centre has already completed the process for firm allocation of bridge coal linkage, allocation of North of Arakhapal coal mine, grant of waiver on environment clearance cess on coal and parity with coal price applicable to the power sector.

It may be noted that the fertiliser plant that has been shut since 2002 is expected to start production by September 2020. The Board for Industrial and Financial Reconstruction (BIFR) had announced its closure in 2002 as it was making losses over a period of time.

The Cabinet Committee on Economic Affairs had in 2014 decided to revive the project after a series of deliberations. The demolition process of some of the portions of the plant started after the approval.