(PV-Tech News) According to the recommendations made by the General Administration of Trade Remedies of India last week, the Indian government has formally notified the extension of the guarantee duty (SGD) for solar equipment originating in China for one year until July 29, 2021. The extension aims to protect Indian manufacturers from suspected dumping by Chinese companies.
The notice shows that from July 30, 2020, to January 28, 2021, the new tax rate applicable to imported products is 14.9%, and then drops to 14.5% in the remaining 6 months. The tariff only applies to solar modules and solar cells.
The extension is somewhat unexpected because the industry generally expects India to withdraw from SGD and switch to BCD, the basic tariff. At present, although BCD may be much lower than required, these two taxes will be parallel for one year. The SGD launched in 2018 will be graded down within two years, from 25% to 15%. This tax has suffered a wide range of negative reviews for failing to effectively achieve the goal of stimulating Indian domestic manufacturing.
Even with a one-year extension, this resolution is somewhat surprising. This may indicate that India hopes to keep BCD at a sufficiently low level in the first year, and at the same time, through SGD, provide additional protection for the first year of Indian domestic companies wishing to establish manufacturing plants.
From Renew Power to Adani Solar to Vikram Solar and Azure Power, major domestic companies in India have announced production plans of more than 10GW.
The Minister of Electricity of India, RK Singh, stated in the industry interaction over the past month that the BCD level is 20-25%. At the same time, he also made it clear that the BCD level will rise after the first year, which will help establish India's domestic manufacturing industry and close Provision time for projects that have signed power purchase agreements.
Judging from the actual implementation stage of the project, the existing solar projects being implemented far exceed 14GW, in addition to another 16-20GW projects allocated after the tender.
The extension notice also did not mention the "non-retroactivity clause." This clause allows developers to claim the difference in cost due to tariffs on equipment prices when signing power purchase agreements. It is expected that this issue will be clarified after the BCD notice is issued. The BCD notice may be released as early as this weekend or early next week.
