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India will soon begin with the imposition of safeguard duty on solar cells and modules which had been put on hold by the government. In a significant order, the Supreme Court of India has made it clear that safeguard duty will be levied effective July 30, 2018. Through this interim order, the apex court of the country has nullified the Orissa High Court’s stay order on levy of safeguard duty on imported solar cells and modules.

According to Mercom’s source at the Supreme Court, “The Ministry of Finance, Government of India, had moved the apex court seeking relief from the stay order put on the levy of safeguard duty on solar cells and modules by the Orissa High Court. This is an interim order and the next hearing is scheduled for October. Basically, this paves the way for levy of duty while the case is being deliberated by the apex body.”

The Directorate General of Trade Remedies (DGTR) had recommended levy of 25 percent safeguard duty on solar cell imports from China and Malaysia for the first year, followed by a phased down approach for a second year. In the first six months of the second year, a safeguard duty of 20 percent will be payable by exporters to India and in the latter half of the second year, exporters will pay a safeguard duty of 15 percent.

Per an industry source aware of the development, “Supreme Court has stayed the stay order by Orissa High Court in case of Safeguard duty. Ministry of Finance had petitioned in the Supreme Court against the stay order passed by Orissa High Court on the order imposing safeguard duty on July 30, 2018. The resulting implication is that solar imports from July 30th may attract a safeguard duty of 25 percent and all the developers who had their solar module shipments released by providing bonds may now have to pay the safeguard duty.”