STFI seeks 'zero' duty on ETC tubes used in solar water heater

Solar Thermal Federation of India (STFI) has urged the Centre to bring evacuated tube collector (ETC) used for making solar water heater under zero duty category in the forthcoming Budget.
"The ETC solar water heater market has 80 per cent of market share of all the solar water heaters, however noticeably the evacuated tubes are still imported largely from China. ETC tubes can be brought under 'zero' duty, irrespective of they are imported by a manufacturer or a trader, STFI said in a statement.
The body thinks that this will help small manufacturers to buy tubes from trader importers at a lesser price.

"If the above is considered, the mandatory requirement for excise registration can be discontinued for manufacturers," it added.
The Union Budget for 2017-18 is expected to be presented in early February.
"STFI wishes to express its concern on some of the issues," it said.

The body further said that since solar energy systems have virtually no taxes hence it must have the least GST slab rate.
"While we are not pursuing for zero GST we do recommend some percentage of GST is imposed for solar water heaters so that the input GST (SGST or IGST) can be recovered. In 'zero GST', manufacturers have to bear the full GST paid on imports which can be anything from 18 per cent to 22 per cent, which will increase the input costs for us," it said.

The countervailing duty (CVD) exemption available now for the parts of solar water heater (tank, stand etc) can be withdrawn, so that either imports as full solar water heater or in parts shall attract full duty, (i.E.) (Basic + CVD+cess+SAD), the body suggested.
This will come approximately 29.5 per cent. Presently, traders are taking undue advantage of this exemption by importing several parts and assembling thus making domestic manufacturing unviable, it added.
The Bureau of Indian Standards (BIS) for solar water heaters are already in place. The various incentives may be made applicable only to BIS complaint systems thus ensure qualitative systems and keep the faith of consumers, it said.

Already, the rising raw material price in India is bleeding the manufacturing industry and it is finding tough to compete with the cheap quality imported systems. There is an urgent need to look into protecting the domestic manufacturers by imposing some protective duty on non-BIS complaint and cheaper imported systems, it added.