Basic Customs Duty on Solar PV Cells and Modules from April 2022

In a significant move to boost domestic solar manufacturing and discourage imports, the Finance Ministry of India has provided its consent for the imposition of 40 per cent customs duty on solar photovoltaic (PV) modules and 25 per cent on solar cells starting from April 1, 2022.

March 10, 2021. By Manu Tayal

In a significant move to boost domestic solar manufacturing and discourage imports, the Finance Ministry of India has provided its consent for the imposition of 40 per cent customs duty on solar photovoltaic (PV) modules and 25 per cent on solar cells starting from April 1, 2022.

India currently levied 14.50 per cent safeguard duty (SGD) on import of solar cells and modules from the China PR, Thailand, and Vietnam, which is likely to expire on July 29, 2021. While, currently there’s no BCD on import of solar cells and modules.

Also, BCD on solar cells and modules does not allow change of law benefit (grandfathering clause) on projects already auctioned.

This information was provided by the Ministry of New & Renewable Energy (MNRE) through a notification stated “the proposal of MNRE to impose BCD on solar cells and modules (without grandfathering of bid out projects) has been agreed to by the Ministry of Finance.”

MNRE had proposed 40 per cent BCD on solar module with CTH code ‘85414012’ and 25 per cent BCD on solar cell with CTH code ‘85414011’ effective from April 1, 2022.

However, the Finance Ministry has also advised that the customs notification in this regard would be issued at appropriate time.

In line with this, the Ministry has advised all industry stakeholders to include provisions in their bid documents, so that bidders take the trajectory into account while quoting tariffs, in all bids where the last date of bid submission is subsequent to this Office Memorandum. In all such bids, the imposition of BCD as per the trajectory will not be considered as change-in-law.

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