Developers Take Legal Route Against Safeguard Duty

Hero Future Energies & Vikram Solar Join ACME Solar To Contest India Government’s Decision To Levy Solar Safeguard Duty
12:36 AM (Beijing Time) - 05. August 2018
Indian solar module maker Vikram Solar is one of the petitioners against including SEZ regions in the safeguard duty investigation, as it says, this will hamper the domestic manufacturing industry. (Photo Credit: Vikram Solar)Indian solar module maker Vikram Solar is one of the petitioners against including SEZ regions in the safeguard duty investigation, as it says, this will hamper the domestic manufacturing industry. (Photo Credit: Vikram Solar)

Key Takeaways

  • ACME Solar is joined by Hero Future Energies and Vikram Solar in a legal battle against government decision to impose safeguard duty
  • Hero Future is worried about no clarity offered by the government in ensuring smooth implementation of the pass-through option for projects already bid out
  • Vikram Solar wants SEZs to be exempt from the duty, and that these be considered at par with manufacturing units located in domestic tariff area (DTA)
  • Vikram Solar also wants already awarded EPC contracts to be out of the ambit of the duty

In May 2018, the Ministry of New and Renewable Energy (MNRE) had confirmed to the Delhi High Court that interests of all stakeholders will be covered if in future there is a need to impose safeguard duty (see No Safeguard Duty On Solar Imports In India). MNRE was responding to a petition filed by ACME Solar challenging the levying of safeguard duty. The plea was eventually dismissed by the court as the government back then confirmed that it had no immediate plans to levy such a duty.

Now, despite ACME Solar getting a Orissa High Court order putting a temporary stay on an imposition of safeguard duties, the Government of India went ahead with the implementation of the tariffs (see 25% Safeguard Duty Imposed By India). It offers no clarity about the projects already confirmed.

Now, Hero Future Energies and Vikram Solar have joined in the legal battle.

The three companies have filed a petition against the Director General (Safeguards) DG of Trade Remedies in the Orissa High Court, according to Mercom India Research. They demand to make the ‘exercise of pass-through option seamless and practical’. They fear the process will get entangled in the bureaucratic and departmental procedures in the absence of clear guidelines.

Hero Future Energies CEO Sunil Jain was quoted by Mercom as saying that the sudden imposition of safeguard duty will affect projects already bid out. If there is no proper and smooth implementation of the pass-through option, these projects may become non-performing assets (NPA).

Local module manufacturer Vikram Solar, which has a manufacturing facility in the special economic zone in West Bengal, is also contesting the government decision in court. It is seeking exemption/clarification for SEZs from the duty, so that these are considered at par with manufacturing units located in domestic tariff area (DTA). It also wants EPC contracts already awarded to not be affected by the duty.

In the midst of all these developments around the safeguard duties, government agencies are on a spree to cancel already conducted auctions as project developers offer higher prices than expected (see SECI Cancels 3 GW Auction, Partially).

 

Anu Bhambhani

Anu Bhambhani is the Senior News Editor of TaiyangNews

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Anu Bhambhani