Solar projects awarded before customs duty change allowed cost pass-through

Change in law allowed for hike in GST rate too as project developers face cost hikes

Solar power projects awarded before the basic customs duty (BCD) on imported equipment kicked in have been allowed by the government to pass on the additional cost of procuring expensive cells and modules.

The government imposed 25 per cent BCD on imported solar cells and 40 per cent on imported modules from April 2022 to support domestic manufacturing. Nearly 85 per cent of Indian solar capacity is built on imported cells and modules, mostly from China.

A notification by the ministry of new and renewable energy (MNRE) said on Tuesday: “solar photovoltaic (PV)/solar PV-wind hybrid power projects wherein last date