Anti-dumping rejections due to public interest: CBIC chairman Vivek Johri

Differences over data interpretation for anti-dumping duty and safeguard duty another key factor, says CBIC chairman

The finance ministry has cited public interest and differences over data interpretation for rejecting anti-dumping duty and safeguard duty recommendations by the commerce ministry. The issue had become a bone of contention between the two ministries.

Central Board of Indirect Taxes and Customs (CBIC) chairman Vivek Johri told Business Standard that the Centre — while taking a call on whether or not to impose anti-dumping duty — has to balance the interests of the manufacturing industry and the user industry. “That is a tightrope walk we do,” he added.

While anti-dumping duty is imposed against a specific country if there is a sudden drop in the price of an imported item, safeguard duty is not country-specific. A sudden surge in imports, irrespective of a price drop, is considered a fit case to safeguard interests of the domestic industry.

According to the present system, the Directorate General of Trade Remedies (DGTR), under the commerce ministry, after a detailed investigation, recommends to the department of revenue in the finance ministry whether or not to impose anti-dumping or safeguard duty on a product. However, the finance ministry has the final authority to either accept or reject the recommendations of the DGTR.

An application to initiate an anti-dumping investigation can be made by the concerned domestic industry to the DGTR. Applications are deemed valid if made by domestic producers, who account for at least 25 per cent of total domestic production of the article in question. An application is also considered to be made if it is supported by domestic producers whose collective output accounts for more than 50 per cent of the total production of the similar article.

Johri said the role of the commerce min­istry is to carry out factual investigation, which it is doing very diligently. “We have no problem with that. It is looking at the data and coming out with very detailed findings. But whether or not it meets the public interest question, it is for the ministry of finance to take a decision whether to impose the duty or not. There could be differences on how you interpret the data,” he added. A commerce ministry official said in the last three years, about 50-60 recommendations by DGTR have been rejected by the finance ministry. “Though the finance ministry may be looking at the bigger picture while taking a final call, this is a new trend,” he added.

Johri said when CBIC analysed anti-dumping duties and their trends over a period of time, it found that there are some cases where anti-dumping duties had been in operation for 15-20 years. “The domestic manufacturers were of fewer in number. They had benefited from the anti-dumping duty for a long time. The users are many and they are often in the MSME (micro, small and medium enterprises) sector. If you were to try and balance the interests of the two, you would find that there are instances that it may not be advisable to impose anti-dumping duty or continue its operation. So, that is what has guided us,” he said.

According to India’s latest trade policy review by the World Trade Organisation (WTO), India continues to be the main user of anti-dumping measures in the WTO.

Most of the investigations initiated by India relate to products from China, followed by those originating from South Korea and the EU-28.