Government may soon impose customs duty on solar equipment

The Ministry notice stated, "The Ministry of New and Renewable Energy consulted with the Ministry of Finance and Department of Heavy Industries regarding the update of this list."

New Delhi (Natural Energy News): The Ministry of New and Renewable Energy has asked solar manufacturers to provide a list of machinery and capital goods that should be exempted from basic customs duty (BCD), indicating that a fee may be levied soon.

"The Ministry of New and Renewable Energy had consulted with the Department of Finance and Heavy Industries regarding updation of this list," the ministry said in the notice.

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An executive at a manufacturing company said the industry was optimistic.

An executive at a manufacturing company said, "This notice likely indicates that the government is close to detecting BCD, as it was before when the ministry reached a deadlock." "Such information was also released earlier this year, but we remain more optimistic this time," the executive said.

Domestic manufacturers have been estimating tariffs on solar equipment for a long time. The Minister of Power and Renewable Energy told reporters in June that basic customs duties were likely to be imposed from 1 August to prevent dumping of Chinese goods and protect national interests, where 80% of solar equipment suffers.

However, due to disagreements over the "grandfathered" clause that would exempt already signed power purchase agreements, implementation was delayed.

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Adding a "grandfathered clause" to existing power purchase agreements would mean an understanding between solar developers and the government that the project cost more than the budget allocated at the time of the agreement's conclusion, and therefore, compensation would be provided through distribution companies Developers.

Singh said that instead, a formula will be implemented on the basis of coal cess to fix the damage caused by security and basic customs duties. While this is expected to provide relief to generators, consumers may have to bear the brunt of such a policy immediately.

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