After duty hikes, Hero, ACME and Vikram Solar go to Court

After the Department of Revenue working under the Ministry of Finance officially notified a 25 percent safeguard duty on imported solar panels (read that report), the next steps, it seems, will be fought in the courts.  For starters, the Orissa High Court had already issued a stay on the proposed order itself, till August 20, on a petition filed by ACME Solar Holdings.

Interestingly, after the release of the findings of the DGTR, the Solar Power Developers Association (SPDA) had written to the commerce ministry seeking complete exemption of the duty for projects currently under development (read that report). However, the order issued by the government doesn’t specifically mention existing or future projects.

If the Orissa High Court order was not enough confusion (read that report), now comes the second batch of legal challenges. Court filings show that Hero Future Energies, ACME Solar and Vikram Solar have filed petitions against Director General (Safeguards) DG of Trade Remedies in the same high court. The safeguard duty is currently applicable to companies in SEZ affecting a majority of the domestic solar manufacturing capacity. The government has not clarified so far as to how the safeguard duty was imposed despite the Orissa court stay order.

Vikram Solar Limited, a key domestic manufacturer, has filed a Writ Petition in Orissa High Court seeking the relief stating the following:

  • Suitable exemption/clarification for SEZs (Special Economic Zones) from duties of safeguard, which will put SEZs at par with manufacturing units located in domestic tariff area (DTA).
  • Considering SEZ units as a part of the domestic industry (DI) for the purpose of safeguard investigation.
  • EPC contracts which are already awarded should be kept out of the ambit of safeguard duty

(Source)

According to the Ministry of Finance, the duty will be levied as follows:

(a) twenty-five percent. ad valorem minus anti-dumping duty payable, if any, when imported during the period from 30th July 2018 to 29th July 2019 (both days inclusive);

(b) twenty per cent. ad valorem minus anti-dumping duty payable, if any, when imported during the period from 30th July 2019 to 29th January 2020 (both days inclusive); and

(c) fifteen per cent. ad valorem minus anti-dumping duty payable, if any, when imported during the period from 30th January 2020 to 29th July 2020 (both days inclusive).

The safeguard duty, for now, will apply to imports from China PR and Malaysia, other developing nations will be exempted from this duty. The order was signed by Mohit Tewari, Under Secretary, GoI. Details on the exact nature of Hero Future Energies plaint are not available, although it seems to assume that it would be on the same lines as ACME solar.

 

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