The Department of Revenue has issued a notification extending the impost of safeguard duty (SGD) on the import of solar cells and modules to India for another year starting 30 July 2020.
Accordingly, the customs will charge a duty of 14.90 per cent on such imports from 30 July 2020, to 29 January 2021, and 14.50 per cent duty from 30 January 2021, to 29 July 2021, for all solar cells and modules imported from People’s Republic of China (PRC), Thailand, and Vietnam.
The duty will apply to cells and module imported from China, Thailand, and Vietnam as well.
The safeguard duty will apply to solar cells whether or not assembled in modules or panels classifiable under the Tariff Headings 85414011 and/or 85414012 of Chapter 85 of Schedule-I of the Customs Tariff Act 1975.
This announcement follows recommendation by the Director-General of Trade Remedies’ (DGTR) for extension of the safeguard duty on the import of solar cells and modules to India for another year starting 30 July 2020.
The effective duty on import of solar gear would now be nearly 25 per cent taking into consideration the 10 per cent basic customs duty and the 14.90 per cent safeguard duty.
With an additional 10 per cent duty expected on top of the safeguard duty in the later part of 2021 and the beginning of 2022, industry expects the effective duty on solar cells and modules to reach levels around 40 per cent.
India imposed 25 per cent safeguard duty on solar cell and module imports from China and Malaysia on 30 July 2018, in a move to protect domestic cell and module manufacturers. The duty was set at 25 per cent for the first year and was to be subsequently phased down with the rate reduced by 5 per cent every six months until it ends in July 2020.
The Directorate General of Trade Remedies initiated a review investigation in March 2020 to see if there was a need to extend the safeguard duty beyond its deadline as demanded by the Indian Solar Manufacturers Association (ISMA), who had sought extension of the duty by another four years.
The domestic manufacturers had provided import data released by the Department of Commerce from 2014-15 to 2019-20 (up to September 2019) to back up their demand for an investigation.