Finally solar developers got some relief, Central Board of Indirect Taxes and Customs (CBITC) has reportedly clarified that the bulk of imported solar panels and modules will not entice customs duty. This clarification from CBITC has put on rest the controversy that had been raging for more than six months.
In an order passed by CBITC in September 2016 said that since power is generated by solar panels and modules they should be classified along with “electrical motors and generators” and should be imposed with 7.5 per cent import duty under the Customs Act (HS Code 8501), apart from various kinds of cess, which amounted to a total of around 10 per cent. However, the implementation started by mid of 2017. ET reports that wntil then solar equipment had always been grouped with “diodes, transistors and similar semiconductor devices, photosensitive semiconductor devices,” etc, (HS Code 8541) whose import was free.
According to the publication in an official order, the CBITC has now clarified that “solar panels or modules equipped with bypass diodes are classifiable in heading 8541” while “solar panels or modules equipped with blocking diodes” as well as those with “blocking diodes and bypass diodes” are “classifiable in heading 8501.” Solar developers have clarified to the publication that solar equipments imported in India are with bypass diodes only, and will thus not attract duty.
For solar power developers the reclassification became a serious issue as the solar imports were held back at all ports across the country, unless the duty was paid. Last year in October, over 1,000 containers of solar equipment piled up at Chennai port alone, with developers contesting the duty charged.