Anti Dumping Duty Imposed on Products

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Pursuant to the recommendations of the Directorate General of Anti-dumping and Allied Duties, the Government has imposed anti-dumping duty on following goods, effective from 21st of October, 2015:

1) Definitive anti-dumping duty has been levied on imports of “Plain Medium Density Fibre Board of thickness 6 mm and above”, originating in, or exported from, China, Malaysia, Thailand and Sri Lanka for a period of five years.

2) Definitive anti-dumping duty has been levied on imports of “Front Axle Beam and Steering Knuckles meant for heavy and medium commercial vehicles”, originating in, or exported from China for a period of five years.

3) Definitive anti-dumping duty has been levied on imports of “Hexamine”, originating in, or exported from China and UAE for a period of five years.

4) Definitive anti-dumping duty has been levied on imports of “All Fully Drawn or Fully Oriented Yarn/Spin Drawn Yarn/Flat Yarn of Polyester (non-textured and non-POY)” originating in, or exported fromChina and Thailand for a period of five years.

current affairsWhat is anti dumping? What is its purpose in International Trade?

Dumping is said to occur when the goods are exported by a country to another country at a price lower than its normal value. This is an unfair trade practice which can have a distortive effect on international trade. 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. In fact, anti dumping is an instrument for ensuring fair trade and is not a measure of protection per se for the domestic industry. It provides relief to the domestic industry against the injury caused by dumping.

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.

Also Read – Latest Changes in Indirect Tax Rates

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 difference between anti dumping duty and Normal Customs duty?

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 of injury to the domestic industry?

Broadly, injury may be analysed in terms of the volume effect and price effect of the dumped imports. The parameters by which injury to the domestic industry is to be assessed in the anti dumping proceedings are such economic indicators having a bearing upon the state of industry as the magnitude of dumping, and the decline in sales, selling price, profits, market share, production, utilisation of capacity etc.

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