21% duty slapped on import of power fears; APP cries foul
Jul 24 2012, 12:28 | By PTI
The government today decided to slap 21% duty on imports of power equipment, mainly to protect domestic companies from cheap Chinese shipments. "Cabinet has approved levying 21% import duty on power equipment sourced from overseas," sources said.
The Cabinet has approved 5% basic customs duty, 12% counter-veiling duty and 4% special additional duty on import of power gear. Earlier this month, the power ministry had floated a proposal seeking higher duty on import of equipment for the power sector.
The power ministry had proposed 5% basic custom duty, 10% counter-veiling duty and 4% special additional duty. Besides, with the recent hike in excise duty of 2%, the overall import duty would be 21%.
At present, equipment imported for projects of less than 1,000 MW capacity attract 5% customs duty, while those above that enjoy exemption. The proposal is aimed at providing a level-playing field to domestic manufacturers such as BHEL and Larsen & Toubro against cheap imports, especially from China.
However, private power generation companies expressed dissatisfaction.
Late last month, the Prime Minister's Office had directed the power ministry to prepare a fresh Cabinet note on the issue. In May, the Cabinet had deferred the proposal to raise the duty on imported power gear. The three ministries -- Power, Commerce and Industry and Heavy Industry -- had differences on the quantum of basic customs duty that can be slapped on power gear imports.
While the power ministry pitched for 5%customs duty, commerce and heavy industry ministries sought 15% and 10%, respectively. A panel headed by Planning Commission Member Arun Maira in its report had suggested imposition of 14% levy with a customs duty of 10%.
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