In a significant development, the Directorate of Revenue Intelligence ( DRI ) is currently investigating six solar companies for possible customs duty evasion related to the import of solar panel components.
The probe, spanning from April 2022 to October 2023, has uncovered instances of customs underpayment and inaccurate declarations during the importation of solar cells and modules from China.
According to reports, officials estimate the evasion amount to be approximately Rs 1,900 crore, with expectations that this figure may increase as the investigation advances. The alleged evasion is believed to have taken place through the misuse of the project import route and the customs warehouse scheme.
The government implemented a 25% basic customs duty on solar cells and a 40% duty on solar modules from April 2022 to promote domestic manufacturing and reduce reliance on Chinese imports. To support the national solar mission, the Centre allowed imports at a concessional rate of 5% under the ‘project import scheme.’ However, several solar companies are accused of exploiting this provision to reduce their tax liability.
A senior official involved in the investigation emphasized that many solar companies were utilizing this channel for their consignments, exceeding project requirements. Additionally, companies reportedly misused the customs warehouse scheme, enabling them to defer import duties until clearance without incurring interest.
The investigation, initiated in November, is expected to serve notices to the implicated companies shortly. Although the official did not disclose the company names, assessments are currently being finalized.
This development follows the DRI’s previous inquiry into potential customs duty evasion by wind energy companies. Prompted by concerns raised by the Ministry of New and Renewable Energy ( MNRE ), the Central Board of Indirect Taxes and Customs ( CBIC ) issued a circular in July 2022, revoking permissions for the customs warehouse scheme due to reported misuse by some solar firms.
As the investigation unfolds, stakeholders await further details and potential consequences for the solar companies under scrutiny.
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