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Power Ministry to float new note calling for duty on imported gear

The Prime Minister’s Office has directed the Power Ministry to float a new Cabinet note on hiking the duty on the import of power equipment into the country

Written by ENS Economic Bureau | New Delhi |
June 21, 2012 1:05:49 am

The Prime Minister’s Office (PMO) has directed the Power Ministry to float a new Cabinet note on hiking the duty on the import of power equipment into the country. The move is aimed at countering the surge in imports,mainly from China,and to provide a level-playing field to domestic manufacturers such as Larsen & Toubro and the state-owned BHEL.

“The Power Ministry will send to the Cabinet a new note to impose 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 Chatterji,was attended by representatives from the ministries of finance,power and heavy industries.

At present,equipment imported for projects of less than 1,000 MW capacity attract a five per cent customs duty,while those above that are exempt from duty altogether under the Centre’s ‘mega power policy’. Domestic manufacturers have demanded the imposition of a duty on overseas power gear to compensate for the excise duty paid by the homegrown firms.

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 on the quantum of the duty.”

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The problems faced by domestic manufacturers vis-à-vis equipment imports have been flagged at the highest levels in government and the issue has been listed at least thrice on the Cabinet agenda in the past 24 months. A decision,however,has been deferred amid lobbying from user groups who were in favour of deploying Chinese gear in their projects.

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