Domestic players located at SEZs expressed concerned over Government imposing basic customs duty on solar equipment’s
Domestic Solar Manufacturers seems worried over the government’s plan to levy basic customs duty (BCD) on solar equipment.
Currently, more than 40 percent of domestic solar manufacturers have their units in SEZ’s and thus not entitled for the BCD benefits.
The domestic solar manufacturers located in the Special Economic Zones (SEZs) are worried over the levy of basic customs duty (BCD) plans of the government, on solar equipment’s.
They are concerned because when the BCD will come into effect, they will also fall under the umbrella and it will raise their overall product cost for domestic sales. Since the domestic solar manufacturers whose units are located at SEZs, will not get the benefits of custom duties – it is going to seriously impact their businesses.
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According to industry experts, of the country’s total installed solar cell and solar modules manufacturing capacity – around 41 per cent of domestic cell manufacturing units and more than 45 per cent of domestic module manufacturing unit are currently located at SEZs.
While the remaining players are located outside SEZ at DTAs (domestic tariff areas). Thus, these industry players have argued that the imposition of BCD will not fully solve the purpose of providing level playing field for the domestic solar manufacturers.
According to media reports, many of the industry players located at SEZ’s have made a request to the government to ensure that the manufacturing units located at DTAs (domestic tariff areas) and SEZ are treated on the similar basis in regards to custom duties and taxation purpose.
Since the domestic renewable energy sector has the potential to generate around four lakh jobs for the next three years, they sought “immediate intervention” by government to provide all domestic solar manufacturers with a level playing field.
At present there are no BCD on solar cells and solar modules. The government has only levied safeguard duty on imports of solar equipment since July 2018 that is scheduled to expire in July 2020.
The government has levied 25% safeguard duty on the items for a period of July 30, 2018 and July, 2019. During the period from July 30, 2019, and January 29, 2020, it slowly came down to 20 %. At present, it is 15% between January 30, 2020-July 29, 2020.
