Govt To Levy Up To 40 Per Cent Basic Customs Duty On Imported Solar Equipment From April To Boost Local Manufacturing

In a bid to encourage the domestic production of the solar equipment, the government is gearing up for levying up to 40 per cent basic customs duty (BCD) on solar modules and cells that are imported into the country.

The BCD will be levied on the solar imports from 1 April this year and is part of the government's plan to reduce dependence on imported equipment.

According to a Ministry of New and Renewable Energy (MNRE) notification, a 40 per cent charge will be imposed on solar modules imported from abroad while the solar cells will attract 25 per cent duty, reports Economic Times.

"Considering India's huge solar targets and that electricity is a strategic sector of the economy, India needs to develop domestic solar manufacturing capacities and reduce its dependence on imports to avoid disruption in future," the notification was quoted by ET as saying.

According to the report, the domestic manufacturers of the solar equipment have been expecting the duty on solar imports since Finance Minister Nirmala Sitharaman included it in her Union Budget proposal in 2020.

Union Power and Renewable Energy Minister R K Singh had in June last year said that such a basic customs duty was supposed to be imposed from 1 August 2020 to prevent dumping of Chinese goods as well as protecting national interests.

However, due to disagreements between the Finance Ministry and MNRE, the implementation of the BCD got delayed till now.