The Power Ministry will send the proposal for levying 14 per cent duty on imported power gear, mainly from China, to the Cabinet for approval within 15 days.
"We have received comments from all the ministries over the 14 per cent import duty issue, we would soon send the note to the Cabinet for its nod...say in 15 days," a Power Ministry official told PTI.
The ministry, in December, circulated a draft cabinet note proposing imposition of 14 per cent duty on imports of power equipment, in an attempt to provide a level playing field to domestic manufacturers like BHEL and Larsen & Toubro.
Domestic power equipment makers like BHEL and L&T have been demanding levy of 14 per cent duty on imported electrical equipment in order to provide them a cushion against local taxes. These firms are facing stiff competition from cheaper overseas gear mainly from China.
A committee headed by Planning Commission Member, Arun Maira had also suggested imposition of 10 per cent customs duty and 4 per cent special additional duty.
At present, projects with less than 1,000 MW generation capacity attract 5 per cent import duty while the rest enjoy duty-free import of equipment.
Earlier this week, sources had said that the Department of Heavy Industry (DHI) and the Power Ministry are in favour of 14 per cent import levy, but the Department of Economic Affairs (DEA) believes that 10-12 per cent duty is adequate, they had said, adding the specifics are being worked out.
According to DEA, higher duty structure would not only send a wrong signal to the global investors, but may also lead to increased cost of generation.
The argument is also being advanced by the power generating firms, particularly in the private sector.
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