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Import of solar equipment: Procedural hiccups hurdle tax exemption

Import of solar equipment: Procedural hiccups hurdle tax exemption

ISLAMABAD: Amendments to the procedure put in place for availing tax exemption on import of renewable energy equipment, around 80 shipments of solar equipment worth more than Rs400 million have stuck at ports since the past two months.

As per details, the government had granted customs duty and sales tax exemption on the import of renewable energy equipment under serial no 35-A of SRO 575(I)/2006 to overcome energy crisis.

The importers were required to submit written approval from the Alternative Energy Development Board (AEDB) to avail the tax exemption. However, the Federal Board of Revenue (FBR) through letter C.No 1(56) March/95 dated March 5, 2014 applied additional requirement to get tax exemption on the imports of solar equipment.

According to the letter, benefit of sub-serial 6 of serial no 35-A of SRO 575(I) 2006 shall be available on separate import of solar batteries, inverters and charge controllers only in cases where the importers at the time of import of PV modules furnish complete details of the solar systems comprising of the batteries, inverters and charge controllers which are required for any earlier imported PV modules, duly supported by the contract, lay out plan and drawing etc.

However, solar batteries, inverters and charge controllers imported without solar panels would not be entitled to this exemption regardless of the fact that AEDB certifies to the effect that these are for dedicated use with the solar panels. Customs sources claimed that said decision was made in light of complaints of misuse of said tax facility by the importers.