Solar equipment imports, largely from countries such as China, may soon come under double taxation with the Director General of Trade Remedies (DGTR) looking to consider continued imposition of 15 per cent safeguard duty (SGD) on imports of solar cells and modules beyond the cutoff date of July 29.
The DGTR is scheduled to do oral hearing on extension of SGD on July 3 through video conferencing. If a decision to extend safeguard duty is taken then solar equipment imports from August onwards faces the prospect of double taxation. The power ministry has already said that upto 20-25 per cent basic customs duty is going to be imposed on solar modules and 15-20 per cent on cells.
DGTR’s oral hearing was previously scheduled be held on June 11, 2020, but was postponed due to certain administrative exigencies. Now, the hearing in first week of July will clear the way whether safeguard duty gets extended.
The safeguard duty was imposed starting from July 30, 2018 for a period of two years to protect the domestic industry against dumping of cheap equipment, especially from countries like China that commands over 80 per cent of India’s market for solar gear. The duty was set at 25 per cent for the first year, followed by a phased down approach for the second year, with the rate reduced by 5 per cent every six months until it ends in July, 2020.
With safeguard duty scheduled to end, power ministry proposed a 20-25 per cent basic customs duty on solar module imports for the current year that will go upto 40 per cent level in the next year.