Under the changes, full exemption from basic customs duty has been applied to any "Toughened Glass" and "Silver Paste", which is imported for the manufacture of solar cells or solar modules. However manufacturers are required to declare that the components will only be used in PV systems.
Previously, when a complete module was imported from outside of India, it attracted no customs duty, which impacted on those looking to manufacture modules in India. With the changes, this is no longer the case, and both local PV module and cell manufacturers have welcomed the move.
The customs duty on solar lanterns, the most popular rural household item in India, has also been reduced, from ten percent to five percent. The modules in lanterns, however, do not carry any custom duty.
Furthermore, LEDs used for the manufacture of LED lights and light fixtures are exempt from the special duty of customs, leviable under Section 3(5) of the Customs Tariff Act, 1975. Consequently, the excise duty on LEDs has also been reduced to five percent.
It is expected that the new measures will make PV development in India more attractive.