Module suppliers can heave a sigh of relief for now as they will not have to pay the ‘provisional’ Safeguard Duty of 70 percent for a period of 200 days which was prescribed by the office of Directorate General (DG) Safeguards.

In a major development for the solar sector, the Delhi High Court has disposed a petition filed by ACME Solar against the levy of 70 percent ‘provisional’ Safeguard Duty on solar cell imports from China and Malaysia.

When contacted, an ACME Solar executive told Mercom, “As of now, there will be no levy of 70 percent Safeguard Duty”.

Elaborating further, the executive said, “Standing committee of secretaries which takes the final call in these matters, does not wish to levy the provisional duty and has asked the investigation to be done again and include a larger timeframe.”

According to a source, the Delhi High Court in its response said, “The Safeguard Duty has not yet been levied, come to us for relief once it is levied.” The court, however, did not pass a ruling on whether the duty should be levied or not.

This ruling by the Delhi High Court is similar to the Madras High Court ruling of April 2018, in which it dismissed the writ petition filed by domestic project developer Shapoorji & Pallonji against the levy of 70 percent safeguard duty for 200 days as prescribed by the office of DG Safeguards.

Case Background

In a preliminary finding, the Directorate General of Safeguards Customs and Central Excise had recommended a 70 percent safeguard duty on solar cells imported from China and Malaysia for a period of 200 days.

The recommendation was the result of an investigation carried out by DG Safeguards based on the petition filed by the Indian Solar Manufacturers Association (ISMA). The petition was filed by ISMA on behalf of domestic manufacturers including Mundra Solar PV Limited, Indosolar Limited, Jupiter Solar Power Limited, Websol Energy Systems Limited, and Helios Photo Voltaic Limited.

The companies claimed that they collectively manufacture more than 50 percent of all solar cells manufactured in India. The applicants had requested immediate application of a Safeguard Duty for four years.

What May Happen in the Future?

When contacted, Mercom’s source at DG Safeguards said, “The case has been moved from our jurisdiction. Now, the Commerce Department, through Directorate General of Trade Remedies (DGTR), will oversee the investigation.”

Recently, the Commerce and Industry Minister, Suresh Prabhu, gave his approval for the creation of DGTR in the department.

When contacted, a high-ranking official at the Ministry of New and Renewable Energy (MNRE) said, “So far, the committee overseeing the investigation has not yet decided if the provisional duty will be levied or not. According to the last report made by the standing committee, they were unsure of levying the provisional duty. They have decided to wait for the outcome of the investigation.”