The Government proposes a double layered taxation structure on imports of solar cells and modules in a bid to check proliferation of Chinese equipment in the critical power sector.
Two sources in the government said that in addition to the 15 per cent safeguard duty on solar equipment, a 10 per cent basic customs duty may be levied on solar modules while a 5 per cent duty may be considered for solar cells.
This is lower than the Power Ministry’s earlier proposal to levy 20-25 per cent duty on solar equipment imports, but with continuation of the safeguard duty for one more year, the proposal on basic customs duty has been lowered.
The Power Ministry has revised its proposal on basic customs duty on solar equipment as the Director General of Trade Remedies (DGTR) has extended the levy of safeguard duty at 14.9 per cent on solar cells and modules imported from the China, Thailand and Vietnam for another year till July 29, 2021. This duty will come down to 14.5 per cent from January 30, 2021.
The Power Ministry has earlier proposed basic customs duty of 20-25 per cent on solar module imports for the current year that will go up to 40 per cent level in the next year. Also, the duty on solar cells was proposed at a lower 15-20 per cent level for the first year and a higher 30-40 per cent level in the next year.