High Court decision on solar imports duty likely on February 13

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BENGALURU: The fate of the petition filed against the preliminary recommendation of the Director General (Safeguards) to impose 70% safeguard duty on imported solar panels and modules is likely to be decided on February 13. The date was fixed following a second hearing of the case on February 2.

Solar developer Shapoorji Pallonji Infrastructure Capital, part of the Shapoorji Pallonji group, had moved the Madras High Court maintaining that the DG Safeguards took this decision without hearing the company.

Following an appeal from the Indian Solar Manufacturers Association (ISMA) in early December, seeking a safeguard duty on imported solar equipment on the ground that they were adversely affecting the local solar manufacturing industry, the DG Safeguards sought responses from all stakeholders on December 19, giving them a month to reply.

However, the DG Safeguards’ preliminary findings concluded that imported equipment was indeed causing serious injury to domestic manufacturing and on January 5, he recommended 70% safeguard duty, well before one month had lapsed.

On January 19, the Madras High Court admitted Shapoorji Pallonji’s petition and issued a temporary stay on the implementation of the recommendation.

The petition claimed that since Shapoorji Pallonji was not given an opportunity to place its viewpoint before the DG Safeguards, the findings were “illegal, arbitrary, without authority of law and in contravention of the Customs Tariff Act”.

The counsel for DG Safeguards sought time for the Additional Solicitor General to file his reply. The reply was filed at the subsequent hearing on February 2, but its details have not been revealed.

The recommendation of 70% safeguard duty, while delighting local manufacturers, had set off panic among solar developers since such a steep rise in input costs would throw their financials out of gear, apart from considerably hiking existing solar tariffs, making them unviable for most discoms.

More than 90% of solar panels and modules used in Indian projects are imported, mostly from China, Malaysia and Taiwan, since they are significantly cheaper than locally manufactured ones. In any case, local manufacturing does not have the capacity to meet the needs of India’s ambitious solar programme, which aims to install 100,000 MW by 2022, and has so far commissioned around 17,000 MW.

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