Considering the recent stay order put in force by the Orissa on the safeguard duty notification, the Ministry of Finance has now announced that the government will, for the time being, not insist on the payment of safeguard duty on solar imports.

The ministry has clarified that imported solar cells and modules will be assessed provisionally on furnishing a simple letter of undertaking or bond.

Talking to Mercom about the next step in the matter, an official at the Ministry of Finance, said, “This is a circular.  A provisional assessment of the duty will be made and if the court says that safeguard duty is applicable, they will have to pay back, if it says that duty is not applicable, then they will not pay.”

This notification issued by the central government, is similar to the Madras High Court’s order passed just a few days ago. Madras High Court had instructed customs officials at the Chennai port to provisionally release the module shipment of Shapoorji Pallonji Infrastructure Capital without paying the safeguard duty.  The Madras High Court was responding to a petition filed by Shapoorji Pallonji to clear its goods without requiring the company to pay the safeguard duty.

Background

Recently, the Ministry of Finance announced the levy of a 25 percent safeguard duty based on the final recommendations proposed by the DGTR. The duty took effect on July 30, 2018.

The ministry levied the duty despite an Orissa High Court order that put a stay on the implementation of the safeguard duty on solar modules and cells. ACME Solar had filed a petition after the DGTR recommendations and received the stay order from the court. The court had then directed the government not to issue any notification regarding the safeguard duty until August 20, 2018

However, after the sudden imposition of the duty, Hero Future Energies, ACME Solar and Vikram Solar filed new petitions in the Orissa High Court opposing it.

Then, the Orissa High Court heard the petition filed by Hero Future Energies, ACME, and Vikram Solar against the Directorate General of Trade Remedies (DGTR). Noting that the safeguard duty notification was issued by the ministry despite the court’s stay order on any further notifications until August 20, the bench has directed it to withdraw the notification for now.

The article has been updated with a quote from an official at the Ministry of Finance