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Breather for solar gear importers

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Source: The Economic Times
Monday, February 05, 2018

 BENGALURU: The government is taking steps to ease the entry of importers of solar panels and modules into the new solar import regime, where they have to pay a 7.5% levy on such equipment, along with various cesses, amounting to around 10%. Since India's solar programme began, such imports were always allowed free. 


The Commissioner of Customs, Vijayawada, has written to at least two solar developers saying their solar equipment held back at Krishnapatnam port would be released on furnishing of a bond for the amount due as import duty, without any accompanying bank guarantee. Until now port 
customs officials had been insisting on bank guarantees as well. 

Simultaneously, the Ministry of New and Renewable Energy (MNRE) has written twice to 
NTPC Solar Corporation of India, various state discoms and energy departments of different states seeking a list of solar developers who had won bids before the new levy was imposed. Since the proposed tariffs submitted at these bids were made on a zero-duty calculation, these developers will be exempted from paying the new levy while importing for these particular projects. 

The duty was imposed following a notification from the Central Board of Excise and Customs in September 2016 that since solar panels and modules generate power they should be classified along with "electrical motors and generators" under the Customs Act, which attract 7.5% duty, and not with "diodes, transistors and similar semiconductor devices, photosensitive semiconductor devices including photovoltaic cells whether or not assembled in modules or made up into panels," as they formerly were and whose import is free. Its implementation began a year later in September 2017, initially at Chennai port and later at others as well, but without any formal communication to this effect to solar developers. 

Initially both developers and the MNRE believed this was a misinterpretation of the rules, leading to developers refusing to pay. Since over 90% of the equipment used in Indian solar projects is imported, thousands of containers of solar panels and modules soon began piling up at ports. MNRE Minister R.K. Singh too protested to the finance ministry against the levy, but following a meeting of all government stakeholders in December last year, Finance Secretary Hasmukh Adhia ruled that the new classification should stay. However, no formal notification announcing the change in classification has yet been issued. 

"The commissioner is pleased to accord permission for provisional assessment in respect of imported solar panels with 100% differential duty amount as bond amount and without bank guarantee," the near identical letters to the developers, dated January 24 and February 2, say. 
 
So too the MNRE in two separate letters of January 5 and February 1 has sought "the list of all solar photovoltaic power projects that have been bid out on or before December 31, 2017, in the format attached". 


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