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The Finance Ministry is currently evaluating a proposal to impose a basic customs duty (BCD) of up to 40 per cent on solar module imports, according to Minister of State (Independent Charge) for Power and New and Renewable Energy, RK Singh.
Speaking to reporters through a video conference, Singh said, “It has been proposed that a basic customs duty of up to 25 per cent will be imposed on modules in the first year. In the next year it goes up to 40 per cent.”
On solar cells, a BCD of 15 per cent has been proposed for the first year and it will be raised to 30- 40 per cent, he said.
The new levy is expected to kick in after the safeguard duty on solar imports lapses in July .
Singh had earlier said that his Ministries have proposed imposition of BCD from August on solar modules, solar cells, and solar inverters.
A large chunk of India’s solar energy deployment is dependent on cheaper imports. China, being the largest producer of solar energy generation equipment in the world, also exports its products into India for the same.
But relationship between India and China has been strained after the recent standoff at the Line of Actual Control (LAC). The Indian government is now facing increased domestic pressures to curtail dependence on Chinese imports to meet its local needs.
Draft Electricity Act
On the reforms in the power sector, Singh said the concerns of power tariffs going up after implementation of the proposed draft amendments to Electricity Act are untrue. He said, “Power tariffs are in fact supposed to come down after the reforms we are undertaking. The Central generating companies are absorbing the hike in coal and freight tariffs. There is a reduction in power supply costs to power distribution companies (Discoms) because of merit order dispatch.”
Discoms cannot pass on the burden of their inefficiencies onto the consumers. The regulator has to cap the losses and Discoms will not be allowed to pass on these beyond 15 per ent, Singh said.
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