Move new proposal on equipment import duty: PMO to PowerMin

There's a proposal to increase duty on import of cheap equipment, mainly from China

The Prime Minister's Office (PMO) today asked the Power Ministry to float a new Cabinet note on increasing duty on import of cheap equipment, mainly from China, and to provide a level-playing field to domestic manufacturers.

"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.

The meeting, which was chaired by Principal Secretary in the PMO, Pulok Chatterjee, was attended by officials of the ministries of finance, power and heavy industries. Currently, equipment imported for projects of less than 1,000 MW capacity attract 5% customs duty, while those above that are exempt.

There have been demands to slap higher duty on overseas power gear to provide a level-playing field for domestic manufacturers, mainly from China. In May, the Cabinet had deferred the proposal to raise the duty on imported power gear.

On the quantum of duty on imported power equipment, the official said, "The Power Ministry will take call in regard to quantum of the duty."

Earlier, the ministers of power and commerce had suggested 19% levy, while the Heavy Industry Ministry has recommended a duty of 14%. The three ministries had differences on the quantum of basic customs duty that can be slapped on overseas power gear. While the Power Ministry has pitched for 5% customs duty, Commerce and Heavy Industry Ministries are seeking 15% and 10%, respectively.

A committee headed by Planning Commission Member Arun Maira in its report had suggested imposition of 14% levy -- with a customs duty of 10%. Meanwhile, the Co-ordinating Committee of Secretaries (CCoS) had pitched for 19% levy on imported power gear including 5% customs duty.