DGTR mulling anti-dumping duty on VSF

DGTR mulling anti-dumping duty on VSF

Context:

• Less than a year after the Centre removed anti-dumping duties on imports of ViscoseStaple Fibre from Chinaand Indonesia to make the domestic yarn and garments industry more competitive, the Directorate General of Trade Remedies (DGTR) is set to hold an oral hearing later this month to re-examine the issue and give a fresh finding.
• This follows the order given by the Customs Excise and Service Tax Appellate Tribunal (CESTAT) asking the designate authority to re-investigate whether the cessation of anti-dumping duty would likely lead to a continuation or recurrence of injury
• so as to warrant the imposition of anti-dumping duty for a further period of five years.
• Anti-dumping duties are imposed when it is conclusively proved that a particular item is being exported at a price lower than what is prevailing in the domestic market of the exporter and is leading to disruption in the domestic market, injuring the local producers
• An anti-dumping duty is a protectionist tariff that a domestic government imposes on foreign imports that it believes are priced below fair market value.
• Dumping is a process where a company exports a product at a price lower than the price it normally charges in its own home market.
• The duty is aimed at ensuring fair trading practices and creating a level-playing field for domestic producers vis-a-vis foreign producers and exporters.
• The duty is imposed only after a thorough investigation by a quasi-judicial body, such as Directorate General of Trade Remedies, in India.
• The imposition of anti-dumping duty is permissible under the World Trade Organization (WTO) regime

Sunset review investigation

• Under the Customs Tariff Act, 1975, as amended from time to time and the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules 1995, the Designated Authority is the Directorate General of Trade Remedies.
• Anti-Dumping Duty is applicable only for a selective period. If dumping still continues, the industry can apply for a sunset review at the end of 5 years.
• Globally, once a sunset review is applied for, the duty is extended for 1 year pending investigation.
• In India, industries have been asked to apply for sunset review 9 months before the expiry of the duty.
• This made the Indian players getting deprived of protection for a year compared to their peers across the world.

Different from Countervailing Duties – ADD is a customs duty on imports providing a protection against the dumping of goods at prices substantially lower than the normal value whereas countervailing duty is a customs duty on goods that have received government subsidies in the originating or exporting country.