PMO bats for high import duty on power equipment

The Prime Minister's Office (PMO) on Wednesday directed the power ministry to float a fresh proposal on slapping higher duty on imported power gear, a move aimed at cushioning domestic manufacturers such as BHEL and L&T against cheap imports, mainly from China.

The Prime Minister's Office (PMO) on Wednesday directed the power ministry to float a fresh proposal on slapping higher duty on imported power gear, a move aimed at cushioning domestic manufacturers such as BHEL and L&T against cheap imports, mainly from China.

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Sources said the power ministry is likely to suggest the quantum of overall levy on overseas gear at 19%. With the government raising the excise duty from 2 %to 12 %in the Budget, total levy would be 21%.

"The power ministry will send to the Cabinet a new note to impose duty on imported power equipment," an official said.

Currently, equipment imported for projects of less than 1,000 MW capacity attract 5% customs duty while those above that are exempt. There are demands to slap higher duty on overseas power gear to provide a level-playing field for domestic manufacturers.

In May, the Cabinet had deferred the proposal to raise the duty on imported power gear.

The ministers of power and commerce had suggested 19% levy, while the heavy industry ministry 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 have sought a duty of 15% and 10%, respectively.