Providing Level Playing Field To Units Manufacturing "Solar Cells Whether Or Not Assembled In Modules" In Domestic Tariff Area (DTA) Vis A Vis Those Manufacturing These Devices In SEZ. – Regarding

We, North India Module Manufacturer Association is a non-profit business organization set up under the Societies Registration Act, 1860. NIMMA is an umbrella association for solar module manufacturers in Domestic Tariff Area.

We are trying to fulfil "Make ln India" dream of our honourable Prime Minister Shree Narendra Modi to become independent in solar PV Module manufacturing in our country. ln respect of total market share of these goods produced indigenously, around 90% of the companies that are manufacturing these goods, are located in the DTA and only 10% are in Special Economic Zones. More than 90% manufacturing units available in DTA are SME/MSME and units in SEZ are all large group companies like Adani, waaree, Vikram etc. We are extremely grateful to Government of India, for imposing Safeguard Duty on the imports of "Solar cells whether or not assembled in modules, vide Ministry of Finance Notification No. 01/2018-Customs (SG), Dated 30th July, 2018 and for Textured Toughened (Tempered) Glass Notification No. 38/2017-Customs (ADD) dated 18th August 2OL7 to save the indigenous manufactures from unfair trade practices being followed by the foreign manufacturers/suppliers.

Sir, this representation is in respect of the disadvantage in the form of benefits & tax incentives given to SEZ Units on the raw materials, components, consumables and services on all inputs, vis a vis by units in the DTA. SEZ units are selling solar modules in domestic market by exploiting the benefits passed on to SEZ units'

Whereas the supply of "Solar cells whether or not assembled in modules" from SEZ units into the domestic area is concerned, SEZ units have an unfair advantage over DTA units. Our pinching points are as follows:

1.1 For promotion of exports, all SEZ Units enjoy fiscal / non-fiscal benefits extended by the government. SEZ units are meant for promoting the export of goods and not for competing with & killing the DTA units by such undue tax benefits. While SEZ units get all the raw materials without payment of any duties/taxes, DTA units have to pay heavy duties/taxes on such raw materials.

1.2 ln our case all manufacturing unit located in SEZ throughout the India enjoying all import tax, safeguard duty and anti-dumping duty benefits against DTA units but you can check from anywhere these SEZ units supply their finished goods solar modules to local India market without paying any duty.

1.3 There are no duties on the supply of electricity to SEZ units. lf they are exporting their goods, it is good for the country, but, if they sell in DTA then it becomes unfair for DTA units to compete in the domestic market as all DTA units are paying the duty on the purchase of electricity.

1.4 Whereas domestic clearances are concerned, it is requested that SEZ units should be subjected to same rates of import duty including Safeguard Duty or Anti-Dumping Duty on inputs too which DTA units are subjected to.

1.5 ln addition, unit in DTA, though entitled to take input tax credit, will be paying GST on the goods required for manufacture of Solar cells whether or not assembled in modules at the time of import only, there is always a time lag between the time of import and use of the imported material for manufacturing activity and supply of finished goods. This time lag attracts finance cost for DTA (on the CC/OD facilities taken from banks) payment of GST on the goods at the time of import adds to cost in form of capital investment and interest. Therefore, the manufacturing cost of SEZ units is far less than the units in DTA. 

1.6 The price difference further increases if we take the anti-dumping duty imposed on solar glass for DTA units whereas there is no such duty is levied on SEZ units. As per our information, SEZ units are clearing their products in DTA without paying the obligatory Anti-Dumping Duty'

1.7 The price difference increases still further if we take the Safeguard Duty on solar cells which is levied on DTA units. As you may be aware that recently a SGD @25% has been imposed on Solar cells whether or not assembled in modules.

1.8 lf you are not providing level playing field to all DTA units against SEZ units then DTA units cannot survive in market and going to stop their manufacturing facility. There is a large workforce employed with DTA units. The said anomaly in duty structures will not only place DTA units in disadvantageous position but will also make them economically unviable leading to financial loss, closure and putting livelihood of these people in jeopardy.

Despite getting all benefits, SEZ Units already have an advantageous position and by extending exemption in safeguard duty (SGD) too, SEZ units will lead to disaster for units in DTA. This would ultimately hamper our Primes Minster Sh. Narendra Modi's dream of 'Make in India'. This dream can only be realized through domestic manufacturing, and, not giving unfair advantage to units which are actually meant to increase foreign trade.

Sir, as recommended in Final Findings referring the Ministry of Finance Notification No. O1/2018-Customs (SG), Dated 30th July, 2018 and for Textured Toughened (Tempered) Glass Notification No. 38/2017-Customs (ADD) dated 18th August 2OL7 we wish to emphasize that SEZ units are meant for promoting the export of goods and not for competing with & killing the DTA units by such undue benefits. And, now, SEZ units have requested the government to get exempted from the safe guard duty. This would add salt to the injury for DTA units.

DTA units are in desperate need of government support and encouragement in the over-all interest of the nation for the reasons we have elaborated above. lt is our humble prayer that all our inputs as well as final products may be exempted from all taxation and bring DTA units at par with SEZ units in order to make such goods easily accessible and affordable to common man and provide our members a level playing field vis a vis unit manufacturing these goods in SEZ.

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