Revenue dept withdraws circular on suspension of safeguard duty on solar cells

The revenue department has instructed its field formations to collect safeguard duty on imported solar cells, withdrawing its earlier direction issued a month ago regarding suspension of the levy.

The decision to impose safeguard duty on 'solar cells whether or not assembled in modules or panels' was taken in view of a Supreme Court order, staying an earlier order of the Orissa High Court regarding the duty, the CBIC said in a circular.

On August 13, the Central Board of Indirect Taxes and Customs (CBIC) had instructed field formations that safeguard duty should not be insisted upon imported solar cells for the "time being" in deference to the interim directions passed by the Orissa High Court.

In the meantime, a special leave petition was filed in the matter before the Supreme Court, which stayed the interim order passed by the Orissa High Court.

"Accordingly, all the provisional assessment done in terms of (August 13) instruction shall be finalised and safeguard duty shall be assessed and collected...," said the CBIC under the revenue department while withdrawing the August circular with "immediate effect".

In July, India had imposed safeguard duty on solar cells imports from China and Malaysia for two years to protect domestic players from steep rise in inbound shipments.

The duty was imposed following recommendations by the Directorate General of Trade Remedies (DGTR) under the commerce ministry.

As per the August instruction, the CBIC had asked the officials not to insist on payment of safeguard duty, for the time being. It only asked them to make provisional assessments of the amount of the levy on imported solar cells.

India is targeting to 100 gigawatt (GW) solar capacity by 2022.

Solar cells, electrical devices that convert sunlight directly into electricity, are imported primarily from China, Malaysia, Singapore and Taiwan.

Imports of the cells from these countries account for more than 90 per cent of the total inbound shipments in the country.