The Centre is likely to impose a basic customs duty on imported solar modules and cells next week. “The Department of Revenue has informally given their nod,” a top official from the Ministry for New & Renewable told BusinessLine .

MNRE had asked for a 40 per cent duty on modules and a 25 per cent duty on cells for a period of five years, the official said, adding that the final rate and duration will be determined by the Department of Revenue. Normally taxes are imposed from immediate effect, but MNRE had proposed to the Finance Ministry to bring in the duty from a future date. “That is why it was not included in the Budget” an official had said earlier this month.

“It is likely to be for at least three years as that will give policy certainty so that investors have something to go by,” the official added.

Manufacturers have expressed to the Ministry that, within two years of its introduction, the duty would lead to a rise in the domestic solar module production capacity from around 9-10GW today to 30GW and in the domestic solar cell manufacturing capacity from 2.5GW to 20-25GW, a second official said.

Additionally, the country can build up solar wafer and polysilicon manufacturing capacity from zero at present to 10GW each in three years, the official added.

For over a year, manufacturers have been pushing for a 50 per cent duty on modules. On the other hand, even those developers who are not completely opposed to the duty have been asking to limit it at 20 per cent, the official said.

Published on February 26, 2021