Many feathers have been ruffled recently with reports of steel manufacturers seeking safeguard measures and many other domestic manufacturers contemplating anti-dumping and safeguard petitions to help them cope with the economic slowdown.
Imposition of anti-dumping duty on cold rolled flat products of stainless steel from the European Union, Japan, South Africa, Korea, Taiwan, China, Thailand and the US as also imposition of safeguard duties on imports of soda ash and aluminium flat rolled products and aluminium foil have got many users worried. Many of them want answers to some critical questions. I try to answer some of them here.
Safeguard and anti-dumping duties are exempt under notifications 93/2004-Cus. dated 10.09.2004 and 40/2006-Cus. dated 01.05.2006. So, imports under advance authorisations and duty-free import authorisation will be exempted. However, imports under annual advance authorisations will not be exempt from safeguard and anti-dumping duty, as the notification 94/2004-Cus. dated 10.09.2004 makes no reference to them.
Imports under advance authorisation for deemed exports will be exempt only for certain categories. Exemption from safeguard duty and anti-dumping duty will not be available in respect of materials required for final goods as defined in clause (a),(b),(c),(h) and (i) of the explanation to the notification, 91/2004-Cus. dated 0.09.2004.
The said clauses refer to supplies against advance licence/advance licence for annual requirement/duty free replenishment certificate under the duty exemption/remission scheme, supplies made to export-oriented units or software technology parks or electronic hardware technology parks, supply of goods to the holders of licence under chapter 5 (EPCG) of the Foreign Trade Policy, supply of marine freight containers by export-oriented units and supplies made to projects funded by United Nation agencies. As per Para 4.1.4 of the Foreign Trade Policy, exemption should not be available only for advance authorisations issued against supply of marine freight containers by export-oriented units and supplies made to projects funded by United Nation agencies. But, that is not how the notification reads.
The notifications 93/2004 and 40/2006 mention about safeguard duty under Section 8 of the Customs Tariff Act, 1975. But the said Section 8 refers to imposition of export duties. It must be presumed that the intention in such cases is to exempt safeguard duties under Sections 8B and 8C of the Customs Tariff Act, 1975. Notification 91/2004 refers, however, to safeguard duty under Section 8B of the Customs Tariff Act, 1975. It must be noted that safeguard duties on soda ash and aluminium flat rolled products and aluminium foil are levied under Section 8C of the Customs Tariff Act, 1975, which deals with Transitional Product Specific Safeguard Duty for Imports from China. Deemed Exporters must take note of this subtle difference.
India is getting more protectionist despite protestations to the contrary. Since March beginning, three safeguard notifications and nine anti-dumping notifications have been issued. Besides, import restrictions have been imposed under the Foreign Trade Policy on items like hot rolled coils, toys from China etc. No doubt, the anti-dumping and safeguard actions are taken after due procedures and so, are compatible with the disciplines of the agreements at the World Trade Organization. But China has already protested against restriction on toys imports and India has emerged as the country using anti-dumping actions the most.
The recent spate of protectionist moves has set a mild wave of concern in the trade.
