Heavy Industry Min demands 14% customs duty on power equipment

The Ministry of Heavy Industries and Public Enterprises today said it has sought imposition of up to 14 per cent customs duty on import of power equipment to provide a cushion to domestic manufacturers like BHEL against cheaper imports.

"That (import duty) recommendation my department has already made ... I think the finance ministry will certainly look into it very soon... We have asked for 10-14 per cent (customs duty)," Heavy Industries and Public Enterprises Minister Vilasrao Deshmukh told reporters here at a function.

Domestic power equipment makers, including state-run BHEL have been demanding a 10 per cent customs duty on import of equipment for projects awarded through global bidding and mega power plants, plus 4 per cent special additional duty.     

The demand comes against the backdrop of increasing cheaper imports of power equipment mainly from China.     

At present, 5 per cent customs duty is imposed on equipment imported for projects awarded through the global bidding, while there is no duty on power equipment sourced for mega projects with a capacity of 1,000 MW and above.     

On the other hand, the Power Ministry is not in favour of imposition of 14 per cent duty as it feels that the move would adversely impact the country's power generation capacity addition plans.     

Power Minister Sushilkumar Shinde had earlier said that capacity addition plan during the current Plan period would get stuck and it (customs duty) should only be imposed on the projects that would come up in the next Plan period (2012-17).