ANTI-DUMPING DUTY
AND
ROLE OF CMA
PRAMOD KUMAR
REGIONAL VALUE LEADER
S I Group-India Ltd
Thane Belapur Road
Opp. Jui Nagar Railway Station
Navi Mumbai
TOPICS COVERED:
• Definition of various terms used in Anti-dumping
• Provision for levy of Anti-dumping Duty
• Authorities
• Procedure to be followed for Levy of Anti-dumping Duty
• Costing Formats
• Computation of Non Injurious Price
• Duration of Duty
• Mid Term Review/Sunset Review
• Role of CMA
Why do we need Anti-dumping duty
?
Need for Anti-dumping duty
• It 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
• It provides relief to the domestic industry against the injury
caused by dumping
Definitions of terms used in Anti-dumping
• Like Article - means an article which is identical or alike in all respects to the article under investigation for being
dumped in India or 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 investigation
• Dumping - means export of an article from any country or territory to India at less than its normal value
• Normal value - means the comparable price, in the ordinary course of trade, for the like article when destined for
consumption in the exporting country. When there are no sales of the like article in the ordinary course of trade in
the domestic market of the exporting country or territory, or low volume of the sales in the domestic market of the
exporting country, the normal value shall be either (a) comparable representative price of the like article when exported from the exporting country or territory to an
appropriate third country; or
(b) the cost of production of the said article in the country of origin along with reasonable addition for
administrative, selling and general costs, and for profits
• Injury Margin – means difference between the fair selling price due to domestic industry and the landed cost of
product under consideration
• Margin of Dumping - means 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
contd…..
Definitions of terms used in Anti-dumping
• Non-Injurious Price is that level of price, which the industry is, expected to have charged under normal
circumstances in the Indian market during the Period defined. This price would have enabled reasonable
recovery of cost of production and profit after nullifying adverse impact of those factors of production which
could have adversely effected the company and for which dumped imports can’t be held responsible
• Non-market Economy: The term “non-market economy country” means any country which the designated
authority determines as not operating on market principles of cost or pricing structures, so that sales of
merchandise in such country do not reflect the fair value of the merchandise
• Causal Link between dumping and injury to the domestic industry is required to establish injury to the
domestic industry by dumping. Such a link must exist between the material injury being suffered by the
Indian industry and the dumped imports
• Constructed Export Price: If the export price is not reliable because of association or a compensatory
arrangement between the exporter and the importer or a third party, the export price may be constructed
on the basis of the price at which the imported articles are first resold to an independent buyer. If the
articles are not resold as above or not resold in the same condition as imported, their export price may be
determined on a reasonable basis
Anti-dumping in India is governed by :
• Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on
Dumped Articles and for Determination of Injury) Rules, 1995 governs antidumping,
which is in conformity with ARTICLE VI of the General Agreement in Tariff and Trade,
1994 – Anti-Dumping and Countervailing Duties
BRIEF ON ARTICLE VI OF G A T T , 1994
• The contracting parties recognize that dumping, by which products of
one country are introduced into the commerce of another country at
less than the normal value of the products, is to be condemned if it
causes or threatens material injury to an established industry in the
territory of a contracting party or materially retards the establishment
of a domestic industry
• In order to offset or prevent dumping, a contracting party may levy on
any dumped product an anti-dumping duty not greater in amount
than the margin of dumping in respect of such product
Authorities :
• Anti dumping measures in India are administered by the Directorate General of Anti-dumping and Allied Duties (DGAD) functioning in the
Department of Commerce in the Ministry of Commerce and Industry and the same is headed by the "Designated Authority”
The duties of the designated authority are specified in Anti dumping Rules, 1995 and it includes the following:-
• to investigate as to the existence, degree and effect of any alleged dumping in relation to import of any article;
• to identify the article liable for anti-dumping duty;
•
to submit its findings, provisional or otherwise to Central Government as to(i) normal value, export price and the margin of dumping in relation to the article under investigation, and
(ii) the injury or threat of injury to an industry established in India or material retardation to the establishment of an industry in India
consequent upon the import of such article from the specified countries.
• to recommend to the Central Government –
(i) the amount of anti-dumping duty equal to the margin of dumping or less, which if levied, would remove the injury to the domestic
industry, after considering the principles laid down in the Annexure III to these rules; and
(ii) the date of commencement of such duty;
• to review the need for continuance of anti-dumping duty.
Procedure for levy of Anti-dumping duty:
• Application for Anti-dumping investigation by or on behalf of concerned domestic
industry to DGAD. It must contain sufficient evidence as to the existence of
dumping and such dumped imports are causing or threatening to cause material
injury to the Indian Industry
• Preliminary Screening : to ensure that it is adequately documented and provides
sufficient evidence for initiation
• Initiation : Upon satisfaction that there is sufficient evidence with regard to
dumping, material injury and causal link, a Public Notice is issued initiating an
investigation to determine the existence and effect of the alleged dumping
• Access to information. The Authority provides access to the non-confidential
evidence presented to it by various interested parties in the form of a public file,
which is available for inspection after receipt of the responses
contd….
Procedure for levy of Anti-dumping duty
• Preliminary Findings. D A make a preliminary finding containing the detailed information on the
main reasons behind the determination
• Provisional Duty. A provisional duty not exceeding the margin of dumping may be imposed by the
Central Government on the basis of the preliminary finding recorded by the Designated Authority
• Oral Evidence. The Authority may grant oral hearing anytime during the course of the investigations
• Final Determination. The final determination is normally made within 150 days of the date of
preliminary determination
• Disclosure of information. Facts which form the basis for its decision before the final finding is
made is informed to all interested parties
• Time Limit for investigation process. One year from the date of initiation of the investigation. The
above period may be extended by the Central Government by 6 months
Costing Formats:
• Format A : Statement of Raw Material and Packing Material
consumption and reconciliation
• Format B : Statement of Raw Material Consumption per unit of
Production
• Format C I : Statement of Cost of Production
• Format C II: Allocation and Apportionment of Expenditure
• Format D : Statement of consumption of utilities per unit of
production
• Format E : Statement of Sales Realization
Computation of Non Injurious price
• For calculating Non-Injurious Price, the Authority calls for costing
information from the domestic industry for the period of
investigations and for three previous years.
• In the estimation of Non-Injurious Price, the Authority makes
appropriate analysis of all relevant factors like usage of raw material,
usage of utilities, captive consumption etc. and the actual expenses
during the Period of Investigation including the investments, the
capacity utilization etc.
• The Non-Injurious Price for Domestic Industry is determined
considering the reasonable return on the capital employed
Computation of Non Injurious price
The expenses, which shall not to be considered while assessing non-injurious price
include,—
a) research and development Provisions (unless claimed and substantiated as related to
the product specific research);
b) since non-injurious price is determined at ex-factory level, the post manufacturing
expenses such as commission, discount, freight- outward etc.at ex-factory level;
c) excise duty, sales tax and other tax levies on sales;
d) expenses on job work done for other units;
e) royalty, unless it is related to technical know-how for the product;
f) trading activity of product under consideration; or
g) other non-cost items like bad debts, donations, loss on sale of assets, loss due to fire,
flood, etc.
Duration of duty
The anti dumping duty shall remain in force for a period of five years from the date of imposition of duty.
Duty can be reviewed by the Designated Authority anytime before the expiry of the said period. Such a review
can be done suo moto or on the basis of a request received from an interested party in view of the changed
circumstances.
The review may result in the withdrawal of the duty or in the variation of the duty level depending upon the
new circumstances.
An interested party can file a request for review only after a year from the imposition of duty.
Mid-term Review
Mid-term Review is undertaken by the Designated Authority any time during the period of 5 years when the
levy Anti-Dumping duty is in force.
Sunset Review
Sunset Review is undertaken by the Designated Authority before the expiry of the period of 5 years from the
date of imposition of Anti-Dumping duty to decide the continuation or other wise of the Anti-dumping duty
beyond the stipulated period of five years. The purpose of a Sunset review is to investigate whether the
cessation of anti-dumping duty is like to lead to continuation or recurrence of dumping and injury.
Role of C M A
• Antidumping provides huge opportunity to CMA’s because of their in
depth knowledge of Costing, analytical skills and understanding of
legal issues involved
• Since CMA’s have details of product cost and profitability of their
clients, they can assist client to file antidumping investigation
application if they notice decline in profitability due to surge in
cheaper imports
• Well equipped with knowledge of C A S, which will help in preparing
costing formats
• Certification of Costing Formats.
Thank You
Pramod Kumar
Pramod.Kumar@siigroup.com
9920621130