Safeguard duty to continue for another year: DGTR

DGTR has recommended the continuation of the safeguard duties on imports of solar cells and modules from China that has now been extended for one more year.

As per the official notification released on Wednesday, the Directorate General of Trade Remedies (DGTR) has extended the safeguard duty by one year till 29 July 2021.

The official notification recommended a duty of 14.9 percent to be levied for the first six months starting 30 July 2020 till 28th January 2021. While in the last six months the duty will likely be lowered at 14.5 percent.

Malaysia Exempted

Earlier in 2018, for the first time, India levied safeguard duty for two years on solar equipment imports from China and Malaysia. This was in order to prevent the dumping of low-cost solar equipment in the country.

However, in the new extension notification, Malaysia has been exempted of the safeguard duty.

In addition, there is no mention of any exceptions or a ‘grandfather clause’ in the notification that would allow renewable energy companies to claim reimbursement of the duties they have paid toward importing equipment from China.

A Year is Adequate

While the domestic solar equipment manufacturers have requested and were looking for four years of extension of the safeguard duty. But, the DGTR recommended the extension of one year, saying that it would be sufficient.

Though the DGTR recommendation was welcomed by domestic solar manufacturing associations but requested to raise the rates at least up to 50 percent.

Twin Levy Expected

As Power Minister RK Singh has recently stated that in August, a BCD of 15-20 percent would be levied on solar equipment, which would double in a year. Thus, the industry was expecting the basic customs duty (BCD) to replace the safeguard duty at the month end of July.

However, as no official announcement has yet been issued, now stakeholders in the industry are expecting the BCD to be levied along with the safeguard duty.