Duty casts a cloud over solar panel makers in export zones

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Duty casts a cloud over solar panel makers in export zones

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Eleven solar panel manufacturers in export oriented zones are on the verge of shutting down and another four have already downed shutters saying the import duty structure has rendered them uncompetitive in the local and export markets. “If export oriented units sell their panels in the domestic market, they become un-exempt from duty exemption while their counterparts from Special Economic Zones and Domestic Tariff Areas’ remains exempt from such duties.This has resulted in a large number of units in export oriented units on the verge of closing down their operations while some has already been shut because they have been rendered uncompetitive,“ said Subrata Mukherjee, director at Sova Power and founding member of the All India EoU Solar Manufacturers.

“There are around 46 solar panel manufacturers in India of which 11 are in export oriented units and they are the ones not being able to compete with their counterparts in other zones. Some 4-5 have already shut operations,“ said Vineet Jain, director at Green Brilliance Energy.

According to Cecil Anthony, director at Synergy Electric and a member of the Association that has been recently formed, the market price for solar panel of one watt is around Rs 30 of which the cost of materials including cost of assembly and other raw materials come to around Rs 25 a watt. “We are being asked to pay a duty of Rs 2. Another Rs 2.75 is needed for paying for manpower, admin and power costs. Leaving us with 75 paise per watt which is not enough to pay finance costs,“ said Anthony.

Sujit Saha, general manager at Sova Solar said: “As a result of the customs duty cost of solar modules produced at EoUs have increased by 25% in comparison to their counterparts in other zones. It is killing the firms at EoUs. In fact we have two units one at an EoU the other at a SEZ.

The unit at the EoU has already suspended operations. “If this goes on for long rest of the 11 units would have to down shutters,“ said Anthony.

“We have made several representations to the power ministry as well as the ministry of new and renewable energy.

They have agreed to the fact that firms at EoUs should be treated at par with their counterparts in other units.

However, there has been no notification or clarification on this front. In fact, the customs department has already sent us a show-cause notice asking why won’t these units at EoU pay the customs duty because the law requires them to pay the duty,“ said Saha.