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No custom duties on imported solar panels: India's CBITC

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After six months of confusion, the CBITC has now finally clarified there will be no customs duty on the bulk of imported solar panels and modules.

In September 2016, an order was passed from CBITC classified the solar panel and modules along with electric motors and generators, under Customs Act. HS Code 8501).

As per CBITC's clarification, no customs duty will be applicable on the bulk of imported solar panels and modules.

Earlier than September 2016, the solar equipment was grouped with diodes, photosensitive semiconductors, and other semiconductor devices. (HS Code 8541). Their import was free.

In September 2016, an order was passed from CBITC classified the solar panel and modules along with electric motors and generators, under Customs Act (HS Code 8501). The reason cited for the inclusion was the generation of power by the modules. The import duty on the electrical equipment was 7.5 percent excluding other cess and taxes, which when included come to 10 percent. This was implemented in the middle of 2017.     

The official order has finally distinguished between the two and put the solar equipment under the heading 8541.The most solar panels that are being imported by India use bypass diode and hence will be duty-free.

This has come as a relief to many solar developers as about more than 80 percent of the solar project in India use imported panels.

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