FinMin rules out Customs duty relief for magnet PLI scheme

No exemption from Customs duty or cess is required for importing machinery and equipment used in manufacturing rare-earth permanent magnets (REPM) under the proposed production-linked incentive (PLI) scheme, the Department of Revenue in the Ministry of Finance hastoldthe Ministry of Heavy Industries.

- DEEPAK PATEL

About two-thirds of the requirements of rare-earth oxides to run plants with a combined capacity of 6,000 tonnes per year of REPM will have to be arranged through imports

Officials said the capital subsidy being planned under thescheme would be sufficient to offset the higher costs involved.

Expenditure on plants and the machinery to be imported to set them up in India is expected to be significantly higher since almost all such equipment will have to be sourced from countries other than China, such as Germany, Japan, and South Korea, officials stated.

‘The PLI scheme proposes financial incentives — both capital subsidy andsales-based — for winning bidders (private players) that will set up five manufacturing plants with a combined production capacity of 6,000 tonnes per year.

The Ministry of Heavy Industries (MHI) is the nodal ministry forthescheme, which is under inter-ministerial discussion.

Officials mentioned the draft PLI scheme initially included a provision for exemption from basic customs duty (BCD) and cess on capital goods (plants and machinery) required for setting up REPM-manufacturing units.