Float fresh note on import duty: PMO tells power ministry

New Delhi: The Prime Minister’s Office today directed the power ministry to float a fresh proposal on slapping higher duty on imported power gear, a move aimed at cushioning domestic manufacturers such as BHEL and L&T against cheap imports, mainly from China.

Sources said the power ministry is likely to suggest the quantum of overall levy on overseas gear at 19 percent, as proposed in the earlier Cabinet note. With the government raising the excise duty by 2 percent to 12 percent in the Budget, total levy would be 21 percent, they added.[caption id=“attachment_351341” align=“alignleft” width=“380” caption=“Pulok Chatterji. “]  [/caption]

“The power ministry will send to the Cabinet a new note to impose (higher) duty on imported power equipment, and it is expected to be taken up in the next 20 days,” an official said after attending the PMO meeting.

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Principal secretary in the PMO, Pulok Chatterjee, who chaired the meeting today, is understood to have asked power ministry to prepare a fresh Cabinet note.

The meeting was attended by officials of ministries of finance, power and heavy industries.

Currently, equipment imported for projects of less than 1,000 MW capacity attract five percent customs duty while those above that are exempt. There are demands to slap higher duty on overseas power gear to provide a level-playing field for domestic manufacturers.

In May, the Cabinet had deferred the proposal to raise the duty on imported power gear.

The ministers of power and commerce had suggested 19 percent levy, while the heavy industry ministry recommended a duty of 14 percent.

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The three ministries had differences on the quantum of basic customs duty that can be slapped on overseas power gear. While the power ministry pitched for five percent customs duty, commerce and heavy industry ministries sought 15 percent and 10 percent, respectively.

PTI