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A missing comma seems to be the culprit in an increase of PV prices in the southern Indian state of Karnataka. The problem started January 1 of this year when a four percent sales tax on manufactured renewable energy products, passed by the central government in 1999, went into effect. While most of India’s 25 states voted for legislation to override the levy, the states of Delhi, Haryana and Karnataka have not yet succeeded in lobbying efforts to supersede the central government’s directive. In Karnataka, an attempt by an assortment of renewable energy groups failed at the beginning of April to get the tax dropped, most likely due to grammar. A state amendment to override the tax included exempting »renewable energy devices and equipment for utilizing ocean waves and thermal energy in the oceans.« But this was interpreted by state government tax authorities to mean only devices used as part of ocean wave technology rather than all renewable energy devices. Harish Hande, managing director of Selco Photo Electrification Ltd. in Bangalore, says a simple comma after the word »devices« would have clarified the amendment to cover renewables such as PV. »I am unhappy because I have had to raise prices by four to five percent,« says Hande. The result has been that most of his potential customers have decided to put their purchase of PV equipment on hold until the tax has been taken off the books. The renewables lobbying group of about 100 people will be going back to the state government to put pressure on legislators to exempt renewables. »Why ruin an industry by putting on a tax which would bring in very little to the state?« asks Hande, who hopes the law will be amended by the end of May. William
P. Hirshman
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