A clarification by the National Board of Revenue (NBR) has eased confusion over customs procedures for solar equipment imports, but renewable-energy businesses say it does little to address the bigger problem: high taxes that are keeping solar power less competitive.
The NBR issued the clarification on Monday after customs authorities delayed the release of solar consignments despite duty concessions announced in the FY2026-27 budget.
The revenue authority said solar photovoltaic modules and panels under HS Code 8541.43.00 are covered by both the capital machinery and renewable solar power-related notifications. Importers can therefore declare panels under the capital machinery notification and other solar equipment under the renewable-energy notification in the same bill of entry, subject to the prescribed conditions.
It also clarified that an incorrect HS code cited for solar inverters would not affect the duty concession. Although the notification mentioned HS Code 8504.40.90 instead of 8504.40.40, customs officials have been instructed to follow the product description and allow the applicable benefit.
Manufacturers setting up solar plants can clear required equipment by paying 1 per cent customs duty under capital machinery provisions.
Commercial importers, however, must pay 1 per cent customs duty, 7.5 per cent advance tax and 5 per cent advance income tax, with the latter two adjustable against future liabilities.
For the industry, that distinction highlights a broader tax problem.
“This is merely a clarification,” said Mostafa Al Mahmud, president of the Bangladesh Sustainable and Renewable Energy Association (BSREA).
The move resolves customs-processing issues but does not address the wider tax burden facing solar businesses, he said.
According to Al Mahmud, renewable energy service companies (RESCOs) and engineering, procurement and construction (EPC) importers have received relatively favourable treatment, while industrial and commercial importers continue to face higher costs.
Struggling with the approval procedure, industrial solar importers now face a total tax incidence (TTI) of around 17 per cent, up from about 1 per cent previously, he said. Commercial importers and distributors continue to face substantially higher duties—as high as 50 per cent on a set-up.
The structure risks slowing household and small-business adoption, where consumers typically depend on commercial distributors rather than importing equipment directly.
“The commercial importers and distributors could trigger the household solar revolution that took place in Pakistan,” Al Mahmud said. “But with the high duty, it is not going to happen in Bangladesh.”
The industry argues that solar equipment should be treated as energy infrastructure rather than simply another source of customs revenue.
The argument is gaining weight as Bangladesh faces gas shortages, power-generation constraints and rising energy costs. Solar has a higher upfront cost but requires little fuel once installed, allowing businesses and households to reduce dependence on conventional generation.
Al Mahmud said the potential long-term savings justify bringing solar taxes close to zero.
“The fuel bill paid for electricity generation over two years is enough to establish solar setups that would keep giving free power for 20 years,” he said.
“Still, why the government is not cutting solar setup import duties to near zero is not understandable.”
BSREA also says customs valuation is adding to the burden. A 650-700 watt panel with an actual import price of around $50 is being assessed at nearly $110 under the current weight-based valuation method, with panels valued at $3 per kilogram, according to the association.
BSREA president said reducing import taxes, industry players argue, could accelerate solar adoption, cut fuel imports and ease pressure on foreign-exchange reserves.
The NBR clarification may reduce delays caused by inconsistent HS-code interpretation, but the sector says broader tax and valuation reforms are needed if Bangladesh wants solar deployment to accelerate.
The choice for policymakers is increasingly between collecting more revenue when solar equipment enters the country and enabling a technology that could reduce fuel imports for years.
