Government To Amend Solar Bidding Rules

To reduce the fears of an adverse impact on India’s solar energy programme, caused due to the proposed 70 percent safeguard duty, RK Singh, the Power Minister, released a statement on Wednesday that government would revise the bidding rules to allow pass-through of duty hike. He also added that the government would assure that the rules are not implemented retrospectively.

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Solar Panels

Apart from giving a pass-through of any hike in the duties, the solar power developers are also permitted to make an increase in their tariffs based on which they have bagged the job to recover their extra costs.

RK Singh told the reporters that the prevailing duty structure on the day of the bid should be executed and any kind of changes in the taxes and duties would be passed through. He added that the current bidding document is valid for passing through taxes only, whereas they would now provide the passing through of both taxes and duties.

He also ensured that this amendment in the bidding rules only requires his consent, not even Parliament’s approval is needed.

He further added that an inter-ministerial committee directed by commerce secretary would be finalizing the proposal of Directorate General of Safeguards (DGS) by next week.

The Board of Safeguards headed by the Commerce Secretary are examining the recommendations of the DG Safeguards. The Board will recommend enforcement of duties to Finance Ministry if it agrees to the findings of the DG Safeguards first.

The safeguard measure is a global standard and applies to import from all the countries.

The DGS commented on solar cells in a January 5 recommendation to the finance ministry that all these solar cells which are being imported into India in such an increasing rate that it is causing harm and threat to the domestic industry manufacturing or directly competitive products.

An association of five domestic cell and module makers consisting Adnani Group filed an application, to which DGS recommended that a provisional safeguard duty is to be imposed at the charge of 70 percent ad valorem on the imports of solar cell that may be or maybe not assembled in modules or panels.

Yesterday, in a report, a Parliamentary panel said that no valid area exists for imposing 70 percent safeguard duty on solar equipment imports. It also stated that this imposition would affect the existing product’s growth and would dampen the investor’s sentiment. However, the customs duty on Solar Cells/Panels/Modules is charged at the rate of 7.5 percent. A safeguard duty to the tune of 70 percent has been recommended.

When questioned about the ₹16,000 Crore new Hydro Policy to promote the sector, Singh replied that this has gone for an inter-ministerial consultation and other departments and ministries would give their remarks about the proposal. Only after the comments, the proposal will be finalized for putting before the Cabinet for their approval.

RK Singh said that some discussions are going on boosting the gas-based power plants that include gas pooling of natural and domestic gases. To clarify the government’s e-mobility plan, he said that most of the cars would be electric by 2020 and there would be 30 percent population of e-cars on roads. He added that the ministry is for the liberal regime for setting and managing up electric charges for e-vehicles.

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