Orissa HC Issues Stay Order on Safeguard Duty on Solar Imports until August 20

The move came after the Directorate General of Trade Restrictions (DGTR) had recommended, last week, that safeguard duty on solar imports from China and Malaysia should be imposed for 2 years in a phased manner i.e. 25 percent for the first year, 20 percent for the first six months of the second year, and 15 percent for the remaining six months of the second year.

After the objection plea filed by one of the leading solar developer ACME Solar Holdings, Orissa High Court has stayed the imposition of safeguard duty on solar imports until August 20.

The move came after the Directorate General of Trade Restrictions (DGTR) had recommended, last week, that safeguard duty on solar imports from China and Malaysia should be imposed for 2 years in a phased manner i.e. 25 percent for the first year, 20 percent for the first six months of the second year, and 15 percent for the remaining six months of the second year.

Further, the DGTR noted that this was a fit case for safeguard duty because imports, which had spiked sharply since 2014-15, were causing serious injury to domestic solar equipment production.

“(There has been) a significant increase in imports, (following which) domestic industry’s share of total sales of solar panels and modules has fallen from 10 percent of the total in 2014-15 to 4 percent in 2015-16 to 8 percent in 2016-17 and 7 percent in 2017-18 (up to September 2017),” its report recommending the duty, said.

However, ACME declined to comment. “There are serious errors in the DGTR judgment. Its main argument that excessive imports are causing major injury to the domestic industry is not correct,” said a source close to the development.

The DGTR’s recommendation of safeguard duty on solar imports had said that the impact of the duty would be passed on to the discoms which bought power from the developers. But the source noted that if developers of already sanctioned solar projects increased their tariffs in response, there was no guarantee that state power regulators and state discoms would agree to paying more.

Source: ET