Government weighs 19 per cent import duty on equipment for mega power projects

Import of power generation equipment for projects above 1,000 MW into the country will likely attract duty at the rate of 19 per cent. The Cabinet Committee on Economic Affairs (CCEA) is expected to decide on the issue, a move aimed at benefiting domestic manufacturers.

If approved, this would give a big boost to domestic equipment manufacturers like BHEL, L&T and Bharat Forge pressed hard by cheap equipment imported from China.

The duty hike may not go down well with power producers such as Reliance Power, which rely heavily on equipment imported from China.

It may be noted that the Supreme Court in its order in the NTPC case had ruled in NTPC's favour.

While it is yet not known the rate or quantum of the proposed import levy, the finance ministry has favoured the imposition of 5 per cent basic customs duty, 4 per cent additional import duty and 10 per cent countervailing duty, adding up to a total of 19 per cent.

The power ministry is likely to move a formal proposal for the consideration of CCEA soon.