Government to Remove Duties on Solar PV Manufacturing Equipment


ISLAMABAD: The government is likely to eliminate duties on the import of plant, machinery, equipment, and raw materials used in the manufacturing of solar PV panels in the 2024-25 budget, according to well-informed sources from Business Recorder.

The Managing Director of the Private Power Infrastructure Board (PPIB) highlighted that while the Fifth Schedule of the Customs Act, 1969 exempts customs duty on solar PV systems (including PV modules, charge controllers, inverters, and batteries), industrial entities importing machinery and equipment for local solar PV panel manufacturing face varying customs duties, supplementary sales tax, and advance income tax.

This disparity raises operational costs for local manufacturers, creating an uneven competitive landscape between imported and locally manufactured equipment. To address this issue and promote a fair competitive environment, the PPIB strongly recommends exempting all plant, machinery, equipment, and raw materials used in the manufacturing and assembly of solar PV panels from duties and taxes.

The PPIB argues that this measure will incentivize and strengthen domestic production, reduce foreign exchange outflows, and lower operational costs. As the local industry matures, a gradual withdrawal of duty and tax exemptions on imported finished solar PV products could further benefit the industry.

This phased approach aligns with the objectives of the alternative and renewable energy policy, 2019, which supports a balanced transition while fostering the growth and sustainability of local industries. The PPIB has requested the Federal Board of Revenue (FBR) to address this anomaly in the upcoming budget proposals by providing duty exemptions for solar PV manufacturing equipment and materials.

Story by Mushtaq Ghumman

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