- As per the report, this kind of move will allow units based in SEZs to be competitive, compared to imports while selling to local customers
- Due to this plan to impose the tax on solar panel imports, companies based in these zones have been led to approach the government to exclude them from it when they sell to domestic buyers
According to a report by Livemint, India’s plan to levy a customs duty on solar panels will be framed in a way that it does not severely hit domestic companies who operate from special economic zones, or SEZs as per a person familiar with the matter. The report added that these kinds of zones are typically considered as foreign territories for import duty purposes.
The report said that the person requesting anonymity said that the government plans to charge a small ‘equalisation levy’ on imports of solar panels from factories based in such SEZs and run by Indian companies to sell to domestic customers. It will be in lieu of the basic customs duty that is set to be levied on imports of solar components from other nations like China and Malaysia.
Level-playing field
As per the report, this kind of move will allow units based in SEZs to be competitive, compared to imports while selling to local customers. It will also make a level-playing field for companies outside these zones who do not receive similar tax and other benefits said the report.
The report added that India had set up these SEZs to boost exports and earn valuable foreign exchange. Due to this plan to impose the tax on solar panel imports, companies based in these zones have been led to approach the government to exclude them from it when they sell to domestic buyers. The SEZ units said the tax incentives that initially helped them set up shop have dried up.
