To put an end to the controversy that has been circling the market for more than six months now, the Central Board of Indirect Taxes and Customs (CBITC) has said that the bulk imports of solar panels will not attract any custom duty.
Earlier, the solar panels and modules were classified as electrical motors and generators as they generated electricity. This category under the customs attracted 7.5 percent import duty and also various kinds of different cess. This took the figure to 10 percent. Implementation of these duties took place only in middle of 2017.
Now the solar panels have been reclassified as diodes, transistors and similar photosensitive semiconductor devices by the Central Board of Indirect Taxes and Customs (CBITC). This category is free from imports. But the solar panels or modules equipped with bypass diodes are classified in blocking diodes and bypass diodes which again fall in the category of electric motors and generators.
This reclassification was a result of stocks being held back at the ports starting from Chennai port first where more than 1000 containers piled up by October last year. Later it was started at all the ports of the country. There were many developers protesting against this custom duty figure which was not justified.
The minister from the Ministry of New and Renewable Energy, RK Singh and Secretary, Anand Kumar believed it to be a misunderstanding in the begining but after being turned down by the Customs Officials, MNRE took the matter to the finance ministry counterparts. After analyzing the impediment that the raising cost would produce made the ministry worry about the prime minister’s ambitious target of 100,000 MW of installed solar capacity by 2022.
Finance secretary Hasmukh Adhia argued to continue with the import duty as the solar imports were already subjected to investigations for Anti Dumping and Allied Duties. MNRE in the end received confirmations that the solar equipments wil be exempted from duties as the high custom duties make the projects unviable.
Source: ET Energy World
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