India scraps scheme for duty-free import of solar power equipment

NEW DELHI: India has scrapped a policy allowing duty-free imports of equipment for solar power generation, citing concerns over revenue losses.

- Gireesh Chandra Prasad

In an order effective December 17, the Central Board of Indirect Taxes and Customs (CBIC) has prohibited the use of customs-bonded warehouses for activities related to solar power generation. These warehouses are licensed facilities where imported goods can be stored without immediate customs duty payments.

The move marks a significant change in the application of the Manufacturing and Other Operations in Warehouse Regulations (MOOWR). Designed to boost local production, the framework allows deferred customs duties on imports for manufacturing items sold locally or exported, with no time limit for storage. CBIC said the withdrawal was taken in public interest.