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Budget 2021 - Amendment

in Safeguard Measures

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Key Proposals Introduced in Union Budget 22-23

Budget 2021- ADD amendments

India-UAE CEPA Key Highlights of Chapter-7 Trade Remedies

Budget 2021- CVD amendments

  • What is Dumping?
    When the goods (like Article) are exported by a country to another country at a price lower than its normal value, or less than the cost of production is known as Dumping.
  • What is International Trade Law?
    International trade laws are those areas of law which deal with certain rules and customs regarding the handling of trade between countries or private and it is also used for trade between two private sector companies in two countries.
  • Meaning of Like Article?
    Like Article means an article which is identical or alike in all respects to the article, in the absence of such an article, another article which although not alike in all respects, has characteristics closely resembling those of the articles under investigations.
  • What is Anti-Dumping?
    Anti-dumping is a measure to rectify the situation arising out of the dumping of goods and its trade distortive effect. Thus, the purpose of anti-dumping duty is to rectify the trade distortive effect of dumping and re-establish fair trade. The use of anti-dumping measure as an instrument of fair competition is permitted by the WTO.
  • Does Dumping mean cheap or low-priced imports?
    Often, dumping is mistaken and simplified to mean cheap or low-priced imports. However, it is a misunderstanding of the term. On the other hand, dumping, in its legal sense, means export of goods by a country to another country at a price lower than its normal value. Thus, dumping implies low priced imports only in the relative sense (relative to the normal value), and not in absolute sense. Import of cheap products through illegal trade channels like smuggling do not fall within the purview of anti-dumping measures.
  • Is Anti-Dumping a measure of protection for domestic industry?
    Anti-dumping, in common parlance, is understood as a measure of protection for domestic industry. However, anti-dumping measures do not provide protection per se to the domestic industry. It only serves the purpose of providing remedy to the domestic industry against the injury caused by the unfair trade practice of dumping. In fact, anti-dumping is a trade remedial measure to counteract the trade distortion caused by dumping and the consequential injury to the domestic industry. Only in this sense, it can be seen as a protective measure. It can never be regarded as a protectionist measure.
  • What is the meaning of Domestic Industry?
    The term “domestic industry” means the domestic producers as a whole engaged in the manufacture of the like article or those whose collective output of the said article constitutes a major proportion of the total domestic production of that article. The producers who are related to the exporters or importers of the alleged dumped article or are themselves importers thereof are excluded from the purview of ‘domestic industry’ in certain situations.
  • What is the difference between anti-dumping duty and normal customs duty? Is the anti-dumping over and above the normal customs duty chargeable on the import of an item?
    Although anti-dumping duty is levied and collected by the Customs Authorities, it is entirely different from the Customs duties not only in concept and substance, but also in purpose and operation. The following are the main differences between the two: -Conceptually, anti-dumping and the like measures in their essence are linked to the notion of fair trade. The object of these duties is to guard against the situation arising out of unfair trade practices while customs duties are there as a means of raising revenue and for overall development of the economy. Customs duties fall in the realm of trade and fiscal policies of the Government while anti-dumping and anti-subsidy measures are there as trade remedial measures. The object of anti-dumping and allied duties is to offset the injurious effect of international price discrimination while customs duties have implications for the government revenue and for overall development of the economy. Anti-dumping duties are not necessarily in the nature of a tax measure inasmuch as the Authority is empowered to suspend these duties in case of an exporter offering a price undertaking. Thus, such measures are not always in the form of duties/tax. Anti-dumping and anti-subsidy duties are levied against exporter / country inasmuch as they are country specific and exporter specific as against the customs duties which are general and universally applicable to all imports irrespective of the country of origin and the exporter. Thus, there are basic conceptual and operational differences between the customs duty and the anti-dumping duty. The anti-dumping duty is levied over and above the normal customs duty chargeable on the import of goods in question.
  • What are the parameters used to assess the dumping of goods from a country?
    Dumping means export of goods by one country / territory to the market of another country / territory at a price lower than the normal value. If the export price is lower than the normal value, it constitutes dumping. Thus, there are two fundamental parameters used for determination of dumping, namely, the normal value and the export price. Both these elements have to be compared at the same level of trade, generally at ex-factory level, for assessment of dumping.
  • What is Normal Value?
    Normal value is the comparable price at which the goods under complaint are sold, in the ordinary course of trade, in the domestic market of the exporting country. If the normal value cannot be determined by means of the domestic sales, the following two alternative methods may be employed to determine the normal value: - Comparable representative export price to an appropriate third country. Constructed normal value, i.e. the cost of production in the country of origin with reasonable addition for administrative, selling and general costs and reasonable profits.
  • What is Export price?
    The Export price of the goods allegedly dumped into India means the price at which it is exported to India. It is generally the CIF value minus the adjustments on account of ocean freight, insurance, commission, etc. so as to arrive at the value at ex-factory level.
  • What is Dumping Margin?
    The margin of dumping is the difference between the Normal value and the export price of the goods under complaint. It is generally expressed as a percentage of the export price. Illustration: Normal Value is US$ 110 per kg. Export price is US$ 100 per kg. There is dumping in this case as export price is lower than normal value and dumping margin in this case is US$ 10 per kg., i.e. 10% of the export price. Dumping is a function of two variables, namely Normal Value and Export Price, which must be compared at the same level of trade i.e. at the ex-factory level.
  • What are the essential requisites for initiating an anti-dumping investigation?
    The following are essential for initiating an anti-dumping investigation: - Sufficient evidence to the effect that ;there is dumpingthere is injury to the domestic industry; andthere is a causal link between the dumping and the injury, that is to say, that the dumped imports have caused the alleged injury.The domestic producers expressly supporting the anti-dumping application must account for not less than 25% of the total production of the like article by the domestic industry.The application is deemed to have been made by or on behalf of the domestic industry, if it is supported by those domestic producers whose collective output constitute more than 50% of the total production of the like article produced by that portion of the domestic industry expressing either support for or opposition as the case may be, to the application. Note: This is to further clarify that a domestic industry, which seeks relief, should give sufficient evidence with respect to the above parameters. Unless the above parameters are satisfied, it will not be possible for the Authority to initiate an anti-dumping investigation.
  • What is the legal framework for Anti-dumping, Anti Subsidy and safeguard Measures?"
    Sections 9, 9 A, 9 B and 9 C of the Customs Tariff Act, 1975 as amended in 1995 and the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 and Customs Tariff (Identification, Assessment and Collection of Countervailing Duty on Subsidised Articles and for Determination of Injury) Rules, 1995 framed there under form the legal basis for anti-dumping and anti-subsidy investigations and for the levy of anti-dumping and countervailing duties. These laws are in consonance with the WTO Agreements on Anti-Dumping and Anti Subsidy countervailing measures.
  • Who all can appear in Anti-dumping cases to represent the parties?
    Any representative duly authorised by the petitioner/ interested parties/ Association etc. can appear in the Anti-dumping cases to represent the concerned parties.
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