Power import from Nepal, Bhutan exempted from customs duty

Government has granted customs duty exemption on electricity imported from Bhutan and Nepal while power generated from a plant located in Special Economic Zone (SEZ) would attract a levy of up to 89 paisa per unit.
"Electrical energy originating from Nepal and Bhutan" will attract standard customs rate of "nil", the Central Board of Excise and Customs said in a notification.
India presently imports 1.5 Gigawatt (GW) of hydropower from Bhutan. This is projected to rise to 8 GW by 2022 and imports from Nepal too may start.
The notification said a customs duty of 40-89 paisa per kilowatt hour (kWh) or unit will be levied on power supplied from Processing Area of SEZ to Domestic Tariff Area (DTA).

Giving break-up, it said 40 paisa per unit import duty would be levied on electricity generated in a Processing Area of SEZ using imported coal as fuel and 65 paisa a unit for the same generated using domestic coal as fuel.
The import duty will be 59 paisa per unit if the power was generated using a mix of domestically produced natural gas and imported Regasified Liquefied Natural Gas (RLNG) and 89 paisa if it was generated using RLNG alone.

An import duty of 18-24 paisa per unit would be levied on electricity supplies from Non-Processing Area of SEZ to Domestic Tariff Area, the notification said.

As much as 24 paisa per unit would be levied as import duty if "electrical energy supplied from Non-Processing Area of SEZ to DTA" was generated using imported or domestic coal as fuel. If the same was generated using a mix of domestic gas and LNG, a customs duty of 18 paisa per unit would be levied and the duty would be 21 paisa if the fuel is only imported LNG.
"Electrical energy supplied to DTA by power plants of 1,000 MW or above, and granted formal approval for setting up in SEZ prior to February 27, 2009" will attract "nil" customs duty, the notification said.

The same from power plants of less than 1,000 MW that were granted formal approval for setting up in SEZ prior to February 27, 2009, would attract 18-24 paisa per unit customs duty, it said adding the duty would be 24 paisa if the power was generated using imported or domestic coal and 18 paisa if generated using mix of domestic gas and LNG.
It would be 21 paisa if generated through imported LNG.
Presently, power from project of 1,000 MW and above capacity are charged Rs 100 per 1,000 unit as import duty if the electricity is generated using imported coal and nil if generated using domestic coal. The duty for the same generated using domestic gas is Rs 110 per 1,000 kwh.

In case of projects of less than 1,000 MW, the import duty is Rs 40 per 1,000 kwh for imported coal based plants and Rs 60 per 1,000 kwh for domestic gas-based units.