The Cabinet Committee on Economic
Affairs is likely to recommend a total
import duty of 19 per cent on power
equipment. The move comes in the wake
of representations made by Indian power
equipment makers like BHEL, Larsen &
Toubro, etc against cheaper imported
gear, especially from China. Currently,
there is a duty of 5 per cent on power
equipment of less than 1,000 mw and
almost nil duty on equipment above
1,000 mw.
The proposed 19 per cent total import
duty will include basic customs duty (5
per cent), additional import duty (4 per
cent) and countervailing duty (10 per
cent). The countervailing duty is the
equivalent of excise duty payable by
goods manufacturing within the country.
Power producers are not too happy
with the proposal. Large power
producers like Reliance Power (Anil
Ambani), GMR Group, Sterlite, etc
placing significant orders on Chinese
manufacturers for main plant equipment.
In a related move, the Centre is also
planning to make it mandatory for
UMPPs to procure main plant equipment
through the global bidding process.
Currently, UMPP developers are known
to be placing orders through
negotiations.