The Federal Board of Revenue (FBR) is shocked over the declining prices of solar panels and is exploring the possibility of imposing additional taxes.
The Pakistan Alternative Energy Association (PAEA) has accused the FBR of exerting pressure on solar panel importers to charge higher prices.
In a letter addressed to Chairman FBR, the Executive Director of PAEA Tariq Khattak pointed out the decline in solar panel prices worldwide, which contradicts the regulator’s standard operating procedures to illogically increase domestic rates. Importers are encountering difficulties in managing the import and clearance of solar panels due to this, he said.
Khattak pointed out that the prescribed unit prices of $0.14/W and $0.16/W significantly exceed the current international export prices for these modules on a CFR (Cost and Freight) basis.
This discrepancy between the designated prices in the FBR circular and the actual prices declared on invoices has caught the attention of the State Bank of Pakistan (SBP). The minimum threshold of $0.14 to $0.16/Watt, as outlined in the FBR circular, is now under scrutiny due to the notable differences in pricing declared on invoices.
As a result, transactions exhibiting a substantial variance between the declared unit prices and the FBR circular’s guidelines are now being treated by the SBP as a prime red flag indication. Consequently, such transactions are not being entertained.
The invoice price of solar panels, as stipulated in the relevant FBR circular, supersedes international end-consumer retailer rates. The FBR guidelines do not align with the reality on the ground, especially in the case of Chinese solar panels, which are priced considerably lower, he added.
Due to the unprecedented decline in demand for solar panels worldwide, prices are falling further, however, FBR is charging unreasonably high taxes from solar panel importers, the letter added.
It said the incorrect valuation by FBR is a significant impediment to the import of solar panels and fueling the current energy crisis in the country. The letter remarked that this comes at a time when the government is advocating for alternative energy solutions.
PAEA has urged the immediate withdrawal of the SRO on solar panels, urging the government to permit large-scale imports of solar panels at reduced rates. The letter opined this would facilitate the widespread use of solar panels in domestic, industrial, and commercial applications, subsequently boosting consumption and addressing the energy crisis.
