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India plans to extend safeguard tax on imported solar products
The General Administration of Trade Relief (DGTR) of India recently held an oral hearing. Representatives from domestic and foreign industries offered their opinions on the continued levy of safeguard tax (SGD) on the import of solar cells and modules from India. Representatives from the domestic industry in India stated that the two-year safeguard tax system was not enough and asked the DGTR to extend the tariffs until 2024. They proposed to re-impose tariffs, starting at 15%, and then reducing them by 0.05% each year.
They also suggested that Thailand and Vietnam be included in the safeguard tax, because the imports of products from the country have increased significantly in the past 14 months.
The representatives of the Solar Energy Developers Association (importers) and Thailand replied that new countries cannot be added to the coverage of the safeguard tax, but they can be extended. However, the representative stated that it was unfair to extend the four-year period and suggested that there were too few proposals to reduce the annual tariff.
Representatives from Malaysia, Indonesia, China (Mainland) and Taiwan of China raised their concerns and requested that they be excluded from the scope of tariff collection, citing potential problems with other bilateral agreements with India. They said that if the tariffs were reimposed, in addition to the 20% basic tariff proposed by the government, the safeguard tax would also cause international trade problems.
However, a representative of the Shapoorji Pallonji Group pointed out that the industry has already suffered losses due to the first collection of protection taxes. They believe that this burden will ultimately fall on power developers and consumers.
DGTR listened to the statements of all parties and asked them to submit their arguments in writing before July 9, 2020, and to raise further objections on July 13, 2020.
Event background:
On July 30, 2018, India announced a 25% protection tax on solar cells and modules imported from China and Malaysia to protect domestic battery and module manufacturers. The tariff rate for the first year is 25%, and the tariff rate for the second year is gradually reduced. This tax rate is reduced by 5% every six months until the end of July 31, 2020. The General Administration of Trade Remedy of India launched a review investigation in March 2020 to see if it is necessary to extend the protection tax to four years after its deadline after the application by the Indian Solar Manufacturers Association (ISMA). The domestic manufacturer who submitted the petition provided the import data released by the Ministry of Commerce from 2014 to September 2019 for this investigation. Mercom India’s Clean Energy Research Institute previously reported that solar developers are working hard to compensate for the additional costs incurred by the tariffs, as this has an adverse impact on their business and therefore the speed of development of projects in the country.
However, domestic solar module manufacturers also expressed dissatisfaction after levying safeguard tax for several months. They stated that the policy failed to meet the expected goal of protecting domestic manufacturers from a sudden increase in imports due to the implementation of the safeguard tax for only two years. The implementation period of utility-scale solar projects is 18 to 24 months.
Source: Cable Network
They also suggested that Thailand and Vietnam be included in the safeguard tax, because the imports of products from the country have increased significantly in the past 14 months.
The representatives of the Solar Energy Developers Association (importers) and Thailand replied that new countries cannot be added to the coverage of the safeguard tax, but they can be extended. However, the representative stated that it was unfair to extend the four-year period and suggested that there were too few proposals to reduce the annual tariff.
Representatives from Malaysia, Indonesia, China (Mainland) and Taiwan of China raised their concerns and requested that they be excluded from the scope of tariff collection, citing potential problems with other bilateral agreements with India. They said that if the tariffs were reimposed, in addition to the 20% basic tariff proposed by the government, the safeguard tax would also cause international trade problems.
However, a representative of the Shapoorji Pallonji Group pointed out that the industry has already suffered losses due to the first collection of protection taxes. They believe that this burden will ultimately fall on power developers and consumers.
DGTR listened to the statements of all parties and asked them to submit their arguments in writing before July 9, 2020, and to raise further objections on July 13, 2020.
Event background:
On July 30, 2018, India announced a 25% protection tax on solar cells and modules imported from China and Malaysia to protect domestic battery and module manufacturers. The tariff rate for the first year is 25%, and the tariff rate for the second year is gradually reduced. This tax rate is reduced by 5% every six months until the end of July 31, 2020. The General Administration of Trade Remedy of India launched a review investigation in March 2020 to see if it is necessary to extend the protection tax to four years after its deadline after the application by the Indian Solar Manufacturers Association (ISMA). The domestic manufacturer who submitted the petition provided the import data released by the Ministry of Commerce from 2014 to September 2019 for this investigation. Mercom India’s Clean Energy Research Institute previously reported that solar developers are working hard to compensate for the additional costs incurred by the tariffs, as this has an adverse impact on their business and therefore the speed of development of projects in the country.
However, domestic solar module manufacturers also expressed dissatisfaction after levying safeguard tax for several months. They stated that the policy failed to meet the expected goal of protecting domestic manufacturers from a sudden increase in imports due to the implementation of the safeguard tax for only two years. The implementation period of utility-scale solar projects is 18 to 24 months.
Source: Cable Network
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