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					</table><p>The Central Board of Indirect Taxes and Customs (<a href="https://www.cbic.gov.in/" target="_blank" rel="noopener">CBIC</a>) has revoked the permission granted to solar developers to warehouse imported solar modules to defer payment of the basic customs duty (BCD) on solar cells and modules effective from April 1, 2022.</p>
<p>CBIC stated that manufacturing and other operations in a bonded warehouse is a duty deferment program. So, both BCD and Integrated Goods and Service Tax (IGST) on imports stand deferred. In the case of goods other than capital goods, import duties —both BCD and IGST— stand deferred until they are cleared from the warehouse for home consumption, and no interest is payable on duty. The duty deferment is without any time limitation.</p>
<p>CBIC noticed that a few solar projects applied for permission under section 65 of the Customs Act, 1962 for the warehousing of imported solar modules and declared them as capital goods. A few jurisdictional commissioners granted such permissions.</p>
<p>However, under the Manufacture and Other Operations in Warehouse (no.2) Regulations, 2019 (MOOWR 2019), the removal of final goods from the warehouse requires affixing a one-time-lock to the load compartment of the transport in which such goods are removed.</p>
<p>Since the goods here refer to electricity, affixing a one-time-lock to the load compartment of the means of transport is not possible. The final goods fall squarely outside the scope of MOOWR 2019 because of the inability to satisfy the essence of the prescribed condition.</p>
<p>Under Regulation 20, considering the nature of goods, their manner of transport or storage, the CBIC may exempt a class of goods from the provisions of MOOWR 2019. But CBIC had neither exempted goods of the nature of electricity from MOOWR 19 nor issued regulations relating to the removal of electricity.</p>
<p>Therefore, CBIC has notified that the permissions granted to solar power projects are not per the MOOWR 19 provisions, which are the conditions prescribed by the CBIC under Section 65 of the Customs Act 1962.</p>
<p>CBIC also stated that permissions granted to the solar power projects must be immediately reviewed and follow-up action taken. No more permissions in such cases should be granted under Section 65 of the Customs Act,1962.</p>
<p>Indian solar developers <a href="https://mercomindia.com/solar-module-imports-jump-210-yoy-first-quarter/" target="_blank" rel="noopener">procured</a> 9.7 GW of solar modules in the first quarter of 2022 and stockpiled them ahead of BCD on solar cells and modules. Imports surged by 210% year-over-year compared to 3.13 GW imported in Q1 2021.</p>
<p>The stockpiling was to save on module costs, which increased by 40% once BCD kicked in. The exponential increase in imports of cells and modules was mainly from China. In March alone, the top 20 Indian solar developers imported 4.2 GW of solar modules.</p>
<p>For an in-depth look at the data, analysis, and charts, subscribe to our quarterly market report – <a href="https://mercomindia.com/product/q2-2019-india-solar-market-update/" target="_blank" rel="noopener">Mercom India Solar Update</a><em>.</em> Detailed solar import and export data by component types, suppliers, manufacturers, and developers are available in Mercom’s <a href="https://mercomindia.com/product/india-solar-export-import-tracker/" target="_blank" rel="noopener">India Solar Export-Import Tracker</a>.</p>
<div class="saboxplugin-wrap" itemtype="http://schema.org/Person" itemscope itemprop="author"><div class="saboxplugin-tab"><div class="saboxplugin-gravatar"></div><div class="saboxplugin-authorname"><a href="https://cms.mercomindia.com/author/arjun-joshi/" class="vcard author" rel="author"><span class="fn">Arjun Joshi</span></a></div><div class="saboxplugin-desc"><div itemprop="description"><div class="designboxt">
<p><img class="alignleft" style="border-radius: 50%;height: 50px;margin-top: -4px;border: 1px solid #00b451" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/04/Arjun-Joshi-1.png" width="50" /></p>
<p><strong style="text-decoration: underline">Arjun Joshi,</strong> Staff reporter at Mercom India<br />
<a href="https://mercomindia.com/author/arjun-joshi/" target="_blank" rel="noopener">More articles from Arjun Joshi.</a></p>
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<p><img class="alignleft" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/04/Arjun-Joshi-1.png" width="86" height="102" /><a href="https://mercomindia.com/author/arjun-joshi/" target="_blank" rel="noopener"><strong style="color: #00b451">Arjun Joshi</strong> </a>is a staff reporter at Mercom India. Before joining Mercom, he worked as a technical writer for enterprise resource software companies based in India and abroad. He holds a bachelor’s degree in Journalism, Psychology, and Optional English from Garden City University, Bangalore. <a href="https://mercomindia.com/author/arjun-joshi" target="_blank" rel="noopener">More articles from Arjun Joshi.</a></p>
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CBIC Revokes Customs Duty Deferment on Imported Solar Modules in Warehouses

<p>In a move that could significantly influence the pace of EV adoption in the country, the government has reduced the applicable customs duty on parts and components of electric vehicles.</p>
<p>The government has lowered the customs duty on import of EV components to 10-15 percent. So far, EV components imported for assembly in India attracted import duty of 15-30 percent. However, with this move, the assembled parts and components will now attract a duty of 15 percent and above up to 60 percent.</p>
<p>The Central Board of Indirect Taxes and Customs (<a href="http://www.cbic.gov.in/index" target="_blank" rel="noopener">CBIC</a>) has created a separate category for EV components.</p>
<p>According to the CBIC, <em>“Electrically operated vehicles, if imported as a knocked down kit containing all the necessary components (parts or subassemblies) for assembling a complete vehicle with disassembled battery pack, motor, motor controller, charger, power control unit, energy monitor contractor, brake system, electric compressor not mounted on chassis will attract a duty of 10 percent.” On the other hand, “Electrically operated vehicles, if imported as a knocked down kit containing all the necessary components, parts or subassemblies, for assembling a complete vehicle with pre-assembled battery pack, motor, motor controller, charger, power control unit, energy monitor contractor, brake system, electric compressor not mounted on a chassis or a body assembly, will attract a duty of 15 percent.”</em></p>
<p>Other combinations will attract a duty of 25 percent, according to the notification. Battery pack for use in the manufacture of EVs or hybrid vehicles will attract a duty of 5 percent.</p>
<p>According to the CBIC, EVs and its components with cost, insurance, and freight value more than $40,000 will attract 100 percent duty, while those with value less than $40,000 will attract 60 percent duty.</p>
<p>This is one of the many positive developments that have recently occurred in India’s EV sector. To propel the growth of EVs in India, the government <a href="https://mercomindia.com/gst-li-ion-batteries-reduced-from-28-to-18-percent/" target="_blank" rel="noopener">previously</a> slashed applicable rate of the Goods and Services Tax (GST) on lithium ion batteries. The government is also <a href="https://mercomindia.com/govt-mulls-subsidies-ev-charging-infrastructure/" target="_blank" rel="noopener">planning</a> to subsidize EV charging infrastructure.</p>
<p>Many states have <a href="https://mercomindia.com/states-poised-lead-ev-revolution/" target="_blank" rel="noopener">geared up</a> for the uptake of EVs as a means of mainstream mobility and others have initiated plans to develop EV manufacturing hubs. India is a price-sensitive country and for EVs to appeal to a larger consumer base, the cost needs to go down by a lot. States have their own policies, the reduction in taxation will be complimentary.</p>
<p><a href="https://mercomindia.com/uttarakhand-driving-investments-ev-manufacturing/" target="_blank" rel="noopener">Recently</a> state cabinet of Uttarakhand approved a policy to promote the adoption of electric vehicles in the state, while also incentivizing those who want to foray into EV manufacturing. The Delhi government released its draft <a href="https://mercomindia.com/delhi-draft-ev-policy-2018/" target="_blank" rel="noopener">Delhi Electric Vehicle Policy</a> to improve Delhi’s air quality by bringing down the emissions from transport sector.</p>
<p><a href="https://mercomindia.com/ev-adoption-lags-most-states/" target="_blank" rel="noopener">Previously</a>, Mercom reported that EV sales so far has been inconsistent under the Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles (FAME) program. While some states have made <a href="https://mercomindia.com/states-poised-lead-ev-revolution/" target="_blank" rel="noopener">good progress</a>, many states are well-behind in EV adoption.</p>
<p>The reduction in component cost due to reduction in customs duty will make the adoption of EVs faster in cost-conscious India.</p>
<p>Image credit: Mahindra</p>
<div class="saboxplugin-wrap" itemtype="http://schema.org/Person" itemscope itemprop="author"><div class="saboxplugin-tab"><div class="saboxplugin-gravatar"></div><div class="saboxplugin-authorname"><a href="https://cms.mercomindia.com/author/saumy/" class="vcard author" rel="author"><span class="fn">Saumy Prateek</span></a></div><div class="saboxplugin-desc"><div itemprop="description"><div class="designboxt">
<p><img class="alignleft" style="border-radius: 50%;height: 50px;margin-top: -4px;border: 1px solid #00b451" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/12/saumy-edited-1.png" width="50" /></p>
<p><strong style="text-decoration: underline">Saumy Prateek</strong> Staff reporter at Mercom India<br />
<a href="https://mercomindia.com/author/saumy/" target="_blank" rel="noopener">More articles from Saumy Prateek</a></p>
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<div class="authorboxn"><img class="alignleft" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/12/saumy-edited-1.png" width="79" height="102" /><a href="https://mercomindia.com/author/saumy/" rel="noopener"><strong>Saumy Prateek, </strong> </a>is a senior staff reporter with MercomIndia.com covering business and energy news since 2016. Prior to Mercom, Saumy was a copy editor at Thomson Reuters. Saumy earned his Bachelors Degree in Journalism &amp; Mass Communication from the Manipal Institute of Communication at Manipal University.<a href="https://mercomindia.com/author/saumy/">More articles from Saumy Prateek.</a></div>
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To Boost Indigenous Manufacturing, Government Reduces Customs Duty on EV Components

<p>The Ministry of Finance has issued a new memorandum clarifying that only goods specifically classified under tariff item 8541 40 11 (solar cells whether or not assembled in modules or panels) will be subject to the safeguard duty.</p>
<p>Recent confusion arose as the <a href="http://www.cbic.gov.in/resources/htdocs-cbec/customs/cs-act/notifications/notfns-2018/cs-sg2018/cssg01-2018.pdf;jsessionid=D2C0EE198678C1273AD26AF2280F4437" target="_blank" rel="noopener">earlier notification</a> No. 1/2018-Customs (SG), issued on July 30, 2018 said that &#8220;solar cells whether or not assembled in modules or panels”  falling under heading 8541 or tariff item 8541 40 11 of the first schedule to the Customs Tariff Act, 1975 will attract the safeguard duty.</p>
<p>There are many items, other than solar cells and modules, that are classified under heading 8541 in the customs tariff act, such as: 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 (led), and mounted piezoelectric crystals.</p>
<p>After the imposition of the safeguard duty, the port systems were detecting any bill of entry filed under heading 8541 and sending it to the accessing officer to check the levy of the safeguard duty on that item. This was creating confusion, as other commodities were also sent for evaluation.</p>
<p>Therefore, the department of revenue, under the Ministry of Finance, circulated a memorandum clarifying that since the goods are specifically classified under tariff item 8541 40 11, only this tariff item should be subject to system intervention and sent for safeguard evaluation.</p>
<p>Currently, all these goods are being accessed provisionally following the instruction of Madras High Court.</p>
<p><a href="https://mercomindia.com/madras-court-customs-solar-modules-safeguard/" target="_blank" rel="noopener">Mercom reported earlier that</a> the Madras High Court had instructed customs officials at the Chennai port to provisionally release a module shipment without paying the safeguard duty. The court had asked customs authorities to make a provisional assessment of the safeguard duty payable in the event of upholding the notification and company to furnish a bond.</p>
<p><a href="https://mercomindia.com/safeguard-duty-25-percent-solar/" target="_blank" rel="noopener">Recently</a>, the Ministry of Finance had announced the levy of a 25 percent safeguard duty based on the final <a href="https://mercomindia.com/25-percent-dgtr-safeguard-duty-recommendation/" target="_blank" rel="noopener">recommendations</a> proposed by the <a href="http://www.dgtr.gov.in/" target="_blank" rel="noopener">DGTR</a>. The decision, which caught the industry off guard, was then challenged by solar developers filing a petition at Orissa High Court.</p>
<p><a href="https://mercomindia.com/orissa-court-solar-safeguard-duty-hearing/" target="_blank" rel="noopener">In the latest development</a>, the Orissa High Court fixed September 19, 2018 as the next date of hearing for the case. This means the safeguard duty imposition will be on hold until that date.</p>
<div class="saboxplugin-wrap" itemtype="http://schema.org/Person" itemscope itemprop="author"><div class="saboxplugin-tab"><div class="saboxplugin-gravatar"></div><div class="saboxplugin-authorname"><a href="https://cms.mercomindia.com/author/nitin/" class="vcard author" rel="author"><span class="fn">Nitin Kabeer</span></a></div><div class="saboxplugin-desc"><div itemprop="description"><p><img class="alignleft wp-image-9822" src="https://mercomindia.com/wp-content/uploads/2018/04/nitin-2.png" alt="" width="99" height="105" /><span style="font-family: Calibri"><span style="color: #000000"><span>Nitin is a staff reporter at Mercomindia.com and writes on renewable energy and related sectors. Prior to Mercom, Nitin has worked for CNN IBN, India News, Agricultural Spectrum and Bureaucracy Today. He received his bachelor’s degree in Journalism &amp; Communication from Manipal Institute of Communication at Manipal University and Master’s degree in International Relations from Jindal School of International Affairs. <a href="https://mercomindia.com/author/nitin/">More articles from Nitin Kabeer</a></span></span></span></p>
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Ministry of Finance Clarifies Solar Safeguard Duty Assessment Tariff Code

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