NEW DELHI (Commodity Online): In a bid to make India Solar and Wind Valley on lines of Silicon Valley, The Associated Chambers of Commerce and Industry of India (ASSOCHAM) has urged the Finance Minister to completely exempt imported equipment from levy of import duty for setting up of Solar and Wind Power plants.

In a representation sent to the Ministry of Finance, ASSOCHAM President Dr. Swati Piramal pointed out that currently, import of goods (i.e. Silicon in all forms - polycrystalline silicon or ignots) for manufacture of undiffused silicon wafers; and undiffused silicon, wafers, for the manufacture of solar cell or solar cell modules are exempt from basic custom duty (CVD) and SAD are applicable vide serial 86 of Customs Notification No.21/2002-Cus. dated 01.03.2002.

Apart from the above, power projects are covered under Chapter 98.01 and goods required for setting up such projects are eligible for benefits of concessional rates of basic customs duty @ 5% (CVD) and SAD applicable) vide Sl. No.399 of notification No.21/2002-Cus dated 01-03-2002.

The ASSOCHAM has, therefore, recommended that in order to set up solar energy plants based on Solar Thermal (ST) and Solar Photovoltaic (SP) technology, viable technology solutions are available from global technology players. The same applies in case of wind power generation.

As a first step, the government should exempt supply of imported goods and equipment from customs duty from whole of customs duty, CVD and SAD by inserting suitable entries in Notification No. 21/2002-Cus dated 01.03.2002 in line with the benefits available to thermal, hydro and nuclear power projects.

The ASSOCHAM representation also points out that Ministry of New and Renewable Energy issued policy for development of green energy by providing generation based incentives for solar power projects to be set up during 11th plan period. Global warming caused by emission of Green House Gases is a cause of great concern world over and Kyoto Protocol emphasis on Clean Development Measures (CDM) by developing green energy sources to replace the conventional power projects.

Due to limited availability of fossil fuel, the initiative to promote renewable energy has achieved significant growth in wind energy sector. Similar efforts are required to be made for solar power which has great potential due to best solar radiation of 2400 kWh/m2 throughout the year in large part of Rajasthan and Gujarat. To generate 100,000 MW of solar energy, approx. 3600 sq. km. of land is required while deserts of Rajasthan alone are spread over 175,000 sq. km.

In addition, the ASSOCHAM has also urged for extension of benefits of refund of terminal excise duty as provided in para 8.3(c) of the Foreign Trade Policy 2004-2009 to power projects covered under para 8.2 (g) of Foreign Trade Policy 2004-2009.

It has been pointed out that power projects not covered under Para 8.2(f) of the Foreign Trade Policy 2004-09 are eligible for deemed export benefits under Para 8.2(g) of the FTP 2004-09.

Clause IV of Para 8.4.4 of the FTP 2004-09 restricts the deemed export benefits on goods supplied to such power projects as given in para 8.3(a) - Advance Authorisation for import of duty free inputs/raw material/components and/or para 3.4(b) - Deemed Export Drawback of duties paid on inputs used in manufacture of goods for supply to such power project.

However, refund of Terminal Excise duty as provided in para 8.3(c) is not available on goods supplied to such power projects. In absence of the benefit of refund of terminal excise duty, the benefits given in para 8.3(a) and (b) are meaningless.

Renewable energy Solar