Thursday, April 22, 2010

Allowing more depreciation rate for plant and machinery in the chemical industry - Is it good for Corrosion Control efforts? Does it call separate CREDIT for corrosion prevention measures?

Post Budget Memorandum submitted by Indian Chemical Council On The Union Budget For The Year 2010-11

Depreciation Rate for Chemical Industry: The industry employs processes involving the use of highly corrosive materials. The structures (on which equipment is installed) are also made of steel, which is also prone to corrosion. Some of the chemicals like Brine/ Chlorides corrode even Stainless Steel. Reactions and separation processes involve tough conditions in terms of temperature and pressures from extremely high pressures and temperatures to sub zero temperatures and sub-atmospheric pressures/ extreme vacuum levels. All this takes toll on the equipment used in chemical industry. The wear and tear of plant & machinery in the chemical industry is relatively much higher as compared to other industries. The depreciation allowed for the purpose of income tax was earlier @ 25% which was brought down 15%. It is requested that same may be restored to 25%.

Source: http://www.indianchemicalcouncil.com/news.php?action=read_news&news_id=53

H. R. 3462 `Corrosion Prevention Act of 2009' recently introduced in the US calls for:

SEC. 2. CREDIT FOR CORROSION PREVENTION AND MITIGATION MEASURES FOR ENERGY-RELATED PROPERTY.

(a) In General- Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to business-related credits) is amended by adding at the end the following new section:

`SEC. 45R. CORROSION PREVENTION AND MITIGATION MEASURES FOR ENERGY-RELATED PROPERTY.

`(a) In General- For purposes of section 38, the corrosion prevention and mitigation credit determined under this section for the taxable year is an amount equal to 50 percent of the excess of--

`(1) qualified corrosion prevention and mitigation expenditures with respect to qualified energy-related property, over

`(2) the amount such expenditures would have been, taking into account--

`(A) amounts paid or incurred to satisfy Federal, State, or local requirements,and

`(B) amounts paid for corrosion prevention practices, as certified by a person

certified pursuant to subsection (b)(2).

1 comment:

  1. Hi

    Great idea this blog, hope we can share informations on Corrosion Control and Corrosion Prevention

    all the best

    Vittorio

    Corrosion Prevention & Corrosion Control

    ReplyDelete

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