A new interpretation of customs rules has jeopardised India’s solar energy projects, with officials demanding payment of import duties on crucial inputs that were previously always shipped in without any levy, leaving developers stranded as 90 percent of these modules are not produced in India.
According to Economic Times, this has held up about 1,000 containers of solar modules at the Chennai port, affecting almost all the leading developers because customs authorities have suddenly started classifying solar modules as “electrical motors and generators,” which attract a levy of 7.5 percent, plus 2 percent education cess and 1 percent secondary and higher education cess, industry executives said. The Ministry of New & Renewable Energy is seized of the matter and has written to the finance ministry.
Solar modules were imported smoothly under a category that allows duty-free import of “diodes, transistors and similar semiconductor devices; photosensitive semiconductor devices, including photovoltaic cells whether or not assembled in modules or made up into panels, light-emitting diodes; mounted piezo-electric crystals”. Officials now insist that solar modules are in a different product category, which attracts duties. Developers claim Chennai customs officials have told them to pay the duty – or provide a bank guarantee – and clear their goods and later seek legal recourse for a refund if the classification is incorrect.
