By Victor V. Saulon, March 18 2019; Business World
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THE DEPARTMENT of Energy (DoE) has issued a draft circular to regulate the duty-free importation of renewable energy (RE) machinery, equipment, materials and spare parts in line with the government’s drive to promote ease doing business in the country.
Under the draft rules, duty-free importation is allowed for certified renewable energy developers and operators within 10 years of issuance of their certificates of registration.
Duty-free importation also covers control and communication equipment. They will be exempt from tariffs if they meet the conditions set by the department.
CONDITIONS
Among others, “[t]he RE machinery, equipment, materials and spare parts are not manufactured domestically in reasonable quantity and quality at competitive prices,” the draft read.
“The RE machinery and equipment are directly and actually needed and will be used exclusively in the RE facilities for transformation into energy and delivery of energy to the point of use.”
Another condition is that importation of materials and spare parts “shall be restricted only to component materials and parts for the specific machinery and/or equipment authorized to be imported.”
“The kind of capital machinery and equipment to be imported must be in accordance with the approved work and financial program of the RE facilities,” the draft said, adding: “The RE machinery equipment materials, spare parts are covered by shipping documents in the name of the duly registered RE developer/operator to whom the shipment will be directly delivered by customs authorities.”
The rules allow duty-free importation of components, parts and materials, provided that they are not manufactured domestically in reasonable quantity and quality at competitive prices.
They should also be “directly and actually” needed and be used exclusively in the manufacture or fabrication of RE equipment.
They should be covered by shipping documents in the name of the duly registered manufacturer or fabricator to whom the shipment will be directly delivered by customs authorities.
“Prior approval of the DoE should be obtained before the importation of such components, parts and materials,” the draft read.
It also sets the conditions for the sale or disposal of RE capital equipment, their emergency importation and export.
PROCEDURES
The draft, now awaiting industry comment, also lays down procedures for issuance of duty-free importation certificates.
All applications for duty-free importation are subject to the department’s inspection, reportorial requirements, recording and data base.
The department will have the right of entry or access to any premises to inspect all machinery, equipment, materials and spare parts covered by the circular.
The proposed circular is in line with Republic Act (RA) No. 9513, or the “Renewable Energy Act of 2008,” which mandates the increased use of RE by institutionalizing development of national and local capabilities in the use of renewable energy systems, and promoting their efficient and cost-effective commercial application by providing fiscal and non-fiscal incentives.
Section 2 of RA No. 9485 or the “Anti-Red Tape Act of 2007” — as amended by RA No. 11032 or “The Ease of Doing Business and Efficient Government Service Delivery Act of 2018” — mandates the government to promote transparency in each agency with regard to the manner of transacting with the public.
RA No. 11032 “shall encompass a program for the adoption of simplified requirements and procedures that will reduce red tape and expedite business and non-business related transactions in government,” the department said. — Victor V. Saulon