A new reference price formula with variable duties has been recommended for levying anti dumping duty on newsprint imports.
The commerce ministry, in its final findings on the newsprint dumping case, has argued that a duty should be levied if the landed cost of newsprint is below the reference price.
The reference price has been calculated by taking the lower of the dumping and the injury margin during the period of investigation (April-October 1996) and adding this to the export price at the time. The reference price varies across countries and exporters.
This new formula takes care of concerns of the newspaper industry current prices (it was argued that the rates had gone up subsequent to the investigation) and the prevailing rates of basic customs duty (if basic duty goes up, anti dumping duty will come down).
Ministry sources, however, said that the reference price, in most cases, will not hit the domestic newspaper industry. This is in a sense a minimum price below which duties will apply. It may be recalled that the commerce ministry had recommended provisional duties last year. However, the finance ministry ignored the recommendations and refused to levy the duty under pressure from various newspaper managements.
Ministry sources said such variable duties have been suggested for the first time. Such a recommendation has been possible since the cost of newsprint does not fluctuate heavily. The duty rate will be the difference between the reference prices and the landed value of imports. Exceptions have been made in the case of two exporters from Russia who have given a price undertaking to the anti dumping authority. An analysis of the circulation figures of a major daily showed that the newspaper prices are inelastic to the cost of newsprint, as the same remained at Rs 2.25 per copy even when the price of the imported newsprint ranged from Rs 34,342 pmt to Rs 17,208 pmt.
The authority therefore concluded that imposition of anti dumping duties on imports will not result in serious implications on the newspapers.
