Govt to amend solar bid rule to allow pass through of import duty hike

Allaying fears of an adverse impact on India's solar energy programme due to the proposed 70 per cent safeguard duty, Power Minister R K Singh today said the government will amend bidding rules to allow pass through of duty hike.

The government will ensure that the rules are not implemented retrospectively, he said.

With pass through of any hike in duties, solar power developers will be allowed to increase the tariffs based on which they have bagged the projects, so as to recover the extra cost.

"The duty structure prevailing on the day of bid shall be implemented. Any change in taxes and duties would be passed through. Current bidding document provides for passing through taxes only. We would provide for passing through taxes and duties," Singh told reporters here.

He also assured that the amendment in the bidding rules can be done by his approval and does not require Parliament nod.

He said an inter-ministerial committee headed by commerce secretary will finalise the recommendation on the proposal of Directorate General of Safeguards (DGS) by next week.

The recommendations of the DG Safeguards are examined by the Board of Safeguards, which is headed by the Commerce Secretary. If the Board agrees with the findings of the DG Safeguards, it recommends imposition of duty to the Finance Ministry.

The safeguard duty is a global measure and applies to imports from all countries.

In a January 5 recommendation to the finance ministry, the DGS said solar cells are "being imported into India in such increased quantities and under such conditions so as to cause or threaten to cause serious injury to the domestic industry manufacturing like or directly competitive products".

Acting on an application filed by an association of five domestic cell and module makers including the Adani Group, the DGS recommended "a provisional Safeguard Duty be imposed at the rate of 70 per cent ad valorem on the imports of solar cells whether or not assembled in modules or panels."

A Parliamentary panel had said in its report yesterday that there is no valid ground for imposing 70 per cent safeguard duty on solar equipment imports

At present customs duty on Solar Cells/Modules/ Panels is levied at the rate of 7.5 per cent. Further, a Safeguard Duty to the tune of 70 per cent has been recommended.

Asked about the Rs 16,000 crore new hydro policy to boost the sector, Singh said it has gone for inter-ministerial consultation and other ministries and department would give their comments to the power ministry about the proposal.

After that the proposal will be firmed up for putting before the Cabinet for approval.

On boosting gas based power plants, Singh said that some talks are going on for gas pooling of domestic and imported gas.

Clarifying on the government's ambitious e-mobility plan, he said: "By 2030 most of the cars sold would be electric and population of e-cars would be 30 per cent. We are for liberal regime for setting up electric chargers for e-vehicles."

On the fears that states populism during polls may increase discoms loss by giving freebies to certain category of consumer, the minister said, "In case any state wants to give any subsidy to any category of power consumers, the money would be transferred through direct benefit transfer. The amount of subsidy would be deposited upfront to discom.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)