NBR clarifies 1% duty on solar equipment imports

The National Board of Revenue (NBR) today (17 August) clarified that the industrial users can continue to import solar equipment at a 1% import duty under the capital machinery facility they have previously enjoyed.

The clarification came after businesses raised concerns over the "misinterpretation" of an NBR statutory regulatory order (SRO) at customs stations, which resulted in importers being charged 17% import duty instead of the previously applicable 1%.

According to the NBR clarification, industrial users will continue to enjoy the 1% duty benefit on imports of solar equipment, as the facility was not withdrawn under the new SRO.

However, other users, including commercial users, will be subject to higher duties.

A senior NBR official, speaking to The Business Standard on condition of anonymity, said the government had introduced additional benefits for solar equipment in the last budget but had not withdrawn any existing facilities.

However, officials at the field level, including customs valuation officials, misinterpreted the order and imposed a 17% duty instead of 1%," the official said.

"After this clarification, the issue will be resolved," he added.

Business community sources said most importers had held back their consignments after the higher import duties were imposed, creating complications for businesses.

They said the NBR should have issued the clarification earlier and expressed concern that duties on some solar equipment remain high, which could undermine efforts to promote renewable energy.

Mostafa Al Mahmud, president of the Bangladesh Sustainable and Renewable Energy Association (BSREA), told TBS that the NBR clarification had resolved the import duty issue for industrial users for now.

"However, in some cases, the import duty on solar equipment such as inverters remains as high as 28%, while duties on batteries are above 50%. This is creating an impediment to expanding the use and coverage of renewable energy," he said.