Solar Imports: India defers safeguard duty, provides relief to ongoing projects

Even though postponing the duty on solar cell imports from China and Malaysia is not a long-term resolution, it will offer relief to developers with ongoing PV projects, especially for those with shipments in transit or which arrived after 30 July.

August 14, 2018 Uma Gupta

Solar developers will be able to collect shipments that are in port without paying safeguarding duty as long as they commit to paying the charge later, if it is upheld.

Image: Captain Albert E Theberge/Wikimedia Commons

In compliance with the interim stay order issued by the Odisha High Court, India’s Ministry of Finance has directed the nation’s customs department not to insist on payment of safeguard duty on PV solar cells — whether or not assembled in modules or panels — until after a further hearing on the matter. Solar importers will be able to retrieve consignments by furnishing a bond stipulating payment in case the safeguard duty is upheld.

The imposition of the recently proposed safeguard duties on solar imports is pending before the Odisha High Court after project developers Acme Solar and Vikram Solar challenged the tariff.

The latest decision by the government comes at a time when the Madras High Court has allowed Shapoorji Pallonji to retrieve its solar PV panel consignment from Chennai port – cleared by customs – provided it pay the safeguard duty if the related notification is upheld.

Explaining the impact of the duty postponement, IHS Markit analyst Dharmendra Kumar told pv magazine: “Even though the hold on safeguard duty is not a long-term resolution, it can be seen as an immediate relief to developers with ongoing solar projects, especially for those with their shipment either in transit or arrived at port post 30 July, 2018. If … the duration of hold on safeguard duty goes [on] longer, it will also help in [the] realization of low tariff tenders which were awarded in previous quarters.”

The imposition of the safeguard duty had cast uncertainty over ongoing and new solar projects.

“The dialogue is on with the government departments,” Shekhar Dutt, Director General of the Solar Power Developers Association, previously told pv magazine. “All that the developers want is that whatever has been contracted is honored. Any change afterwards brings in uncertainty. Even financial viability becomes a little less [certain]. Honoring the established contractual provisions is for the good of everybody — developers, financial institutions and even for DISCOMs [distribution companies], as they have the knowledge that this power is going to be supplied at a taxed price.”

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