Thousands of solar modules containers are stuck near Chennai port because all of a sudden customs officials reinterpreted the solar modules import rules.
Solar modules were classified under HS Code 8541. The category encompasses diodes, transistors and similar semiconductor devices; photosensitive semiconductor devices, including photovoltaic cells whether or not assembled in modules or made up into panels, light-emitting diodes; mounted piezo-electric crystals, and attracts no duty. Last month, without any prior intimation, the customs officials suddenly declared solar modules should be categorized as “electrical motors and generators“, hence it should attract a levy of 7.5%, plus 2% education cess and 1% secondary and higher education cess.
After Modi’s repeated emphasis on the Indian solar segment, the solar industry imported solar modules of worth $5-7 billion in the last 3 years. No import duties were levied on these imports. All of a sudden, customs officials have decided to change the rules. As per reports, `375 crore worth of goods which are stuck with a duty implication of over `30 crore.’
This move has infuriated all the solar panel importers who are feeling harassed by the eccentricity of the government officials.
Solar modules are expensive goods with low-profit margin. A sudden increment of 7.5% in the cost can change the profit-economics of the industry. Contractors who didn’t consider this duty amount in cost calculations before taking projects cost are clueless now.
As reported, The Ministry of New & Renewable Energy has written to the finance ministry.
Last year, at the Jawaharlal Nehru Port at Nhava Sheva near Mumbai, customs officials made a similar change in classification. Later, the commissioner of Customs issued a public clarification on it. Now the same problem is back in Chennai.
While PM talks about creating an environment of seamless business in India, government officials are creating chaos among business communities. The abrupt changes in rules will not only derail the momentum of the whole industry, but it will also demotivate other players to do business.