CII Urges Finance Ministry to Impose Basic Custom Duty on Solar Equipment

Industry body Confederation of Indian Industry (CII) have submitted memorandum urging Finance Ministry to impose the basic custom duty (BCD) on solar equipment as announced in the last general budget, stressing that the delay in implementation is impacting investments.

December 22, 2020. By Manu Tayal

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Industry body Confederation of Indian Industry (CII) have submitted memorandum urging Finance Ministry to impose the basic custom duty (BCD) on solar equipment as announced in the last general budget, stressing that the delay in implementation is impacting investments.

As per the PTI report, CII representatives have met with the finance ministry top brass to represent the infrastructure sectors during a scheduled pre-budget meeting.

The memorandum stated that implementation of BCD on solar equipment was announced in the last Union Budget, but the government is yet to lay down the implementation road map, added the media report.

The body stated that delay in BCD levy is impacting the investment decisions of the industry. Earlier in June 2020, Power Minister R K Singh had also talked about imposing BCD on solar equipment.

The CII also urged the ministry to bring power under the ambit of GST (goods and services tax), saying that this has been requested through its pre-budget recommendations for several years.

It is proposed that the electrical energy may be brought to the GST net with lower rate of GST or keeping it exempt from GST, refund of input credit should be given to the generating/transmission/distribution utility, it added. This is pending decision from the Government of India, the body claimed.

About the long-term policy on hybrid- solar plus wind, solar plus storage, solar plus thermal-peaking power, RTC (round the clock power, etc, the body said that the guidelines for this were issued by the Ministry of Power (MoP), and the bid documents have been issued by Solar Energy Corporation of India (SECI) on August 27, 2020.

The CII had made recommendations on this, as Annexure 6 on RTC for RE. “Our humble request to the ministry to please share the way forward on this for the benefit of all stakeholders,” it pleaded.

It also highlighted that decision on Tariff Policy, 2016 and the Draft Electricity Amendments Bill (EAB) 2020 is pending. The Tariff Policy is an important policy for bringing in more competition, especially in the distribution sector.

The EAB 2020 was also hailed by the industry as an important step for bringing in more efficiency to generation, distribution, transmission and alternate procurement like short term market, open access etc. Both are important policy guidelines and are pending implementation from the government, it stated.

About the enforcement of must run status of renewable energy (RE) plants, it said that the issue of artificial curtailment has been a cause of concern for renewable energy generators especially in renewable energy rich states.

“Violating the 'must-run' status of RE plants, SLDCs (state load dispatch centres) have been curtailing RE generation despite adequate grid availability. Discoms or the SLDCs/RLDCs (regional load dispatch centres) permit preferential outflow of power from generating stations by holding up offtake of power from other stations. Therefore, enforcement of must-run in true letter and spirit is yet to be seen in some states,” it pointed out.

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