New Delhi: The government has circulated a
draft Cabinet note proposing imposition of 14 per cent duty on imports of power
equipment, a proposal aimed at providing a level-playing field to domestic
manufacturers like BHEL and Larsen & Toubro.
"We sent the draft note to the Finance
Ministry and the Ministry of Heavy Industry and Public Enterprises for the
imposition of 5 per cent customs duty, 5 per cent special additional duty and 4
per cent countervailing duty on imported power equipment," a Power
Ministry official said.
Domestic power equipment makers like BHEL and
L&T have been demanding levy of 14 per cent duty on imported electrical
equipment, mainly arising from China, in order to provide them a cushion
against local taxes.
In a meeting convened by Minister for Heavy
Industries and Public Enterprises Praful Patel, last month, consensus emerged
on the point that domestic manufacturers like BHEL should be given a
level-playing field with Chinese imports.
The Maira Committee headed by Planning
Commission Member Arun Maira had also suggested imposition of 10 per cent
customs duty and 4 per cent special additional duty.
In one of the meetings of the Committee of
Secretaries (CoS), it had been decided to impose 5 per cent customs duty, 10
per cent countervailing duty and 4 per cent special additional duty on import
of power equipment for mega (of 1,000 MW and above) and ultra mega power
projects (of minimum 4,000 MW capacity).
Currently, projects with less than 1,000 MW
generation capacity attract 5 per cent import duty while the rest enjoy
duty-free import of equipment.
Meanwhile, Association of Power Producers, a body
of private power generation companies feel that this move would lead to
increase in power rates.
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