India relieves most solar modules from customs duty

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
Email

One of the major causes of uncertainty for India’s solar sector has been put to rest after the Central Board of Indirect Taxes and Customs (CBITC) clarified that most PV modules will not be subject to customs duty.

Along with the goods and service tax (GST) and the threat of anti-dumping and Safeguard duties, the customs duty has been one of the key pillars of uncertainty for the Indian market, particularly as Indian developers import an overwhelming majority of their modules.

Solar modules had enjoyed free imports while classified as ‘diodes, transistors and similar semiconductor devices, photosensitive semiconductor devices', under the code CTH 8541. However, a new classification as ‘electrical motors and generators’ under CTH 8501, which included a 7.5% customs duty, started to be implemented gradually last year.

The issue was followed by a long standoff between developers, the Ministry of finance and customs authorities, and with vast quantities of modules held up at ports, as first reported at the time by Indian news outlet Economic Times. However, CBITC has finally come out with the following clarification:

  • Modules equipped with bypass diodes will be classified as CTH 8541
  • Modules equipped with blocking diodes will be classified as CTH 8501
  • Modules equipped with bypass diodes and blocking diodes will be classified as CTH 8501

Vinay Rustagi, managing director at consultancy Bridge to India, told PV Tech that most modules used by the Indian industry would not attract any duty as per this new clarification.

After a string of bad news, Rustagi said this was very welcome, particularly alongside the recent notice clarifying the ‘Change in Law’ provision for solar procurement.

He added that there had been increasing signs that the Ministry of Finance was going to take a rigid stance so that customs duty would apply on modules, so developers should be very happy with the final outcome.

Read Next

PV Tech Premium
April 8, 2021
After a challenging year, India’s solar sector stands primed for something of a rebound. But a host of familiar issues, from the perilous state of DISCOMs to regulatory uncertainty, run the risk of stymying future growth. Vinay Rustagi, managing director at consultancy Bridge to India, talks to PV Tech about the future prospects for Indian solar.
April 8, 2021
Tata Power Solar has expanded its PV manufacturing facility in Bengaluru, India, taking the total production capacity of modules and cells to 1.1GW.
April 1, 2021
Norwegian independent power producer Scatec is looking to collaborate with project developers in India as part of efforts to gain a foothold in the country’s burgeoning solar sector.
PV Tech Premium
March 26, 2021
Solar developers have welcomed clarification on India’s new import duties for modules and cells that will come into effect next year, but questions have been raised about the ability of domestic manufacturers to ramp up production to meet rising demand.
March 23, 2021
Scatec has unveiled a NOK 100 billion (US$11.7 billion) plan that will see the company expand its renewables portfolio to 15GW over the next four years.
March 19, 2021
Indian PV developer Adani Green Energy has raised a US$1.35 billion debt package to initially support the construction of a 1.69GW hybrid portfolio of solar and wind projects in the state of Rajasthan.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
April 13, 2021
Solar Media Events
April 20, 2021
Upcoming Webinars
April 28, 2021
4:00 - 4:30 PM CET