Safeguard Duty on Solar Cells, Modules Extended by One Year

·      Five percent plus Cut on Existing Duty of 20% Notified

Levy not to apply on developing countries with the exception of China, Thailand and Vietnam

The Finance Ministry has extended the safeguard duty on imported solar cells and solar modules by another year as recommended by the Director-General of Trade Remedies (DGTR) earlier this month.

A safeguard duty rate of 14.90 per cent will be imposed on solar cells and modules starting for the first six months starting July 30 (minus anti-dumping duty payable, if any) and 14.50 per cent for the subsequent six months, as per a notification issued by the Finance Ministry on Wednesday, 29 July, 2020.

The duties will not apply on any developing country with the exception of China, Thailand and Vietnam, the notification added.

Safeguard duties can be imposed on items, over and above existing customs duties, if it can be conclusively proved that a steep increase in imports over a period of time resulted in injury and disruption for local businesses.

The DGTR, under the Commerce and Industry Ministry, carried out an investigation for a possible extension of the safeguard duty based on requests made by the domestic industry. It observed that two years of protection has already helped the domestic industry improve its position, but it still needed some time to adjust. Therefore, a one-year extension of the safeguard duty should be allowed.

In July 2018, the DGTR had issued its findings on an application filed by five Indian producers through the Indian Solar Manufacturers’ Association seeking safeguard duties on imports of solar cells and panels. The complainants said the steep increase in imports of solar cells, whether or not assembled in modules or panels, was hurting local producers.

Based on the DGTR’s report, safeguard duties of 25 per cent was imposed from July 30, 2018, to July 29, 2019, and at 20 per cent from July 30, 2019, to July 29, 2020.

[Customs Notification 02/2020-Customs (SG) dated 29th July 2020]

Whereas, the designated authority, vide notification No. 22/1/2020-DGTR, dated the 3rd March 2020, published in the Gazette of India, Extraordinary, Part I, Section 1, dated the 4th March, 2020, had initiated a review, in the matter of continuation of safeguard duty on imports of “Solar Cells whether or not assembled in modules or panels” (hereinafter referred to as the subject goods) falling under tariff items 8541 40 11 or 8541 40 12 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), (hereinafter referred to as the Customs Tariff Act) , imposed vide notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 01/2018- Customs (SG) dated the 30th July, 2018, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 717 (E), dated the 30th July, 2018;

And whereas, in the matter of review of safeguard duty on imports of the subject goods, the designated authority in its final findings, published vide notification No. 22/1/2020 - DGTR, dated the 18th July, 2020, in the Gazette of India, Extraordinary, Part I, Section 1, dated the 18th July, 2020 has recommended continued imposition of the safeguard duty on imports of the subject goods, in order to remove injury to the domestic industry.

Now, therefore, in exercise of the powers conferred by sub-sections (1) and (4) of section 8B of the Customs Tariff Act read with rules 12, 14, 17 and 18 of the Customs Tariff (Identification and Assessment of Safeguard Duty) Rules, 1997, after considering the said findings of the designated authority and subject to the provisions of paragraph 2, hereby imposes on subject goods falling under tariff items 8541 40 11 or 8541 40 12 of the First Schedule to the Customs Tariff Act, when imported into India, a safeguard duty at the following rate, namely:-

(a)  fourteen point nine per cent. ad valorem minus anti-dumping duty payable, if any, when imported during the period from 30th July, 2020 to 29th January, 2021 (both days inclusive); and

(b)  fourteen point five per cent. ad valorem minus anti-dumping duty payable, if any, when imported during the period from 30th January, 2021 to 29th July, 2021 (both days inclusive).

2. Nothing contained in this notification shall apply to imports of subject goods from countries notified as developing countries vide notification No. 19/2016-Customs (N.T.), dated the 5th February, 2016, except People’s Republic of China, Thailand and Vietnam.

[F.No.354/31/2018-TRU (pt.3)]