Duty deferral for solar companies eliminated

Following blatant abuse of the program, the Central Board of Indirect Taxes and Customs (CBIC) has revoked the concessions it had granted under the bonded warehouse scheme, which had allowed solar developers to postpone paying the high import duties on solar cells and modules that became effective on 1 April.

As stated by the CBIC, “Manufacture and other operations in a bonded warehouse is a duty deferment scheme. Thus, both BCD and IGST on imports stand deferred. In the case of goods other than capital goods, the import duties (both BCD and IGST) stand deferred till they are cleared from the warehouse for home consumption, and no interest is payable on duty. In case the finished goods are exported, the duty on the imported inputs (both BCD and IGST) stands remitted i.e., they will not be payable. The duty deferment is without any time limitation.”

According to CBIC, the 2019 Manufacture and Other Operations under the Warehouse Regulations are not followed by the permission’s granting. The permissions given to the kind of generating units mentioned above must be quickly reviewed, and the required follow-up action must be conducted. As stated in section 65 of the Customs Act of 1962, no additional clearances should be provided in such circumstances.

To know more, visit https://www.livemint.com/companies/news/duty-deferment-scrapped-for-solar-cos-11657471066901.html.