GOVERNMENT PLANS TO REDUCE IMPORT TAX ON SOLAR PANEL

India is considering cutting its import tax on solar panels by half and is seeking a rollback in goods and services taxes on the devices.
The decision is aimed to make up for the shortfall in local output amid rising demand for renewable energy.
Government plans to cut the import tax on solar panels from 40% to 20%.
Besides the government has decided to lower the GST on solar panels to 5% from the 12% imposed in 2021.
The change will come as a boost for solar power giants such as Tata Power, Adani Green and Vikram Solar which won solar power supply contracts.
India imposed the 40% solar panel imports tax in April 2022 and a 25% tax on solar cells to discourage Chinese imports.
This is in line with the Prime Ministers plan to become self-reliant and cut emissions by scaling up renewable energy generation.
The proposal comes as the government looks at achieving a target of 365 gigawatts (GW) of installed solar capacity by 2031-32, part of a green energy push that extends from promoting electric cars to sustainable aviation fuel.
India’s current annual solar panels manufacturing capacity is 32 GW per annum but the requirement is 52 GW.
According to government data, India imported $3 billion worth of solar panels in 2021-22, 92% of which came from China.
The tax cuts could potentially lower the cost of imported panels by a fifth, bringing them closer to the prices of domestically made modules.

SOURCE: THE HINDU, THE ECONOMIC TIMES, PIB

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