India will charge 40% Invoice on imported solar modules

In support of the domestic solar panel manufacturing industry, India may soon impose a Basic Property Rate on imported modules and solar cells. It has been reported in various media outlets, 40% basic taxation programs on solar modules and 25% on solar cells are ongoing as stated by energy and renewable energy minister Mr Raj Kumar Singh.

Background of Taxation Work

More than 80% of the solar modules used in solar projects in India are exported to countries such as China and Malaysia. The placement is therefore said to be part of the Atmanirbhar Bharat or Self-Reliant India strategy which aims to increase industry dependence on home-produced modules and cells. Currently, there is a  safeguard duty of 15% security tax levied on such purchases. The property tax base, once operational, will replace security services. The project is expected to start in April 2022.

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Basic Customs Duty, although it is said to be used for the purpose of building a sustainable solar power industry in the country, may not have a positive impact on the nation's electricity consumers in the first place. Once operational, it will lead to an increase in the price of both imported and manufactured solar modules which will also increase the cost of solar systems for consumers in all categories. Being in the early stages of growth, the domestic module manufacturing industry may be struggling to meet demand and quality, and thus have a negative impact on the continuation of sustainable solar designs.

India is a growing economy that has the potential to meet the solar needs of countries around the world. We hope that any developments or changes in future policies will lead to consistent industrial and consumer growth.

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