Delhi HC rules in favour of solar power sector in customs duty case
In what should be a major relief for the solar power sector, the Delhi High Court on Monday (May 6) quashed show cause notices issued by the Central Board of Indirect Taxes and Customs (CBIC) to solar power firms. The CBIC had ruled that these firms were not eligible for the Manufacturing and Other Operations in Warehouse Regulations (MOOWR) scheme.
However, the Delhi High Court terminated the order issued by CBIC, saying that these firms came under the ambit of MOOWR.
Simply put, now solar power developers importing panels and modules can now avail the benefit of the MOOWR scheme, under which they will be allowed to defer the payment of 44% customs duty and 12% GST till the equipment is put to use for generation of electricity.
The MOOWR scheme was introduced by CBIC in 1996 and revamped in 2019 to boost the ‘Make in India’ campaign. The Customs Department, under the scheme, had allowed the deferral of customs duty on imports of goods used as an input in manufacturing, for sale of the final product within the country as well as for exports.
