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Anti Dumping Law And Practice: An Indian Perspective

This research article is totally based on anti-dumping practice in India. The research deals with crimes in trade market and law preventing that crimes in India. These articles have content the definitions of anti-dumping, advantages and disadvantages of anti-dumping and procedure of anti-dumping and how custom department of India deals with it.

The section. 9A, 9AA, 9B of Custom Tariff Act, 1975 also been discussed in this research article under which anti-dumping and dumping procedure are been mentioned by the Indian government.

The General Agreement on tariff and trade (GATT), 1947 article VI under which the antidumping and countervailing duty was been mentioned is also been discussed. There are questions have been taken into consideration such as, what is the meaning of Dumping? What is Anti-Dumping? What are the provisions of antidumping? What is GATT Article-VI? And what are rules and regulation mentioned in Custom Tariff Act, 1975? And so on. This research paper is a doctrinal research based on the references taken from internet.

Aim
To unearth the meaning of Dumping, to learn about the laws pertaining to Anti-Dumping in India and what is it's investigation procedure.

Objective
To analyze the meaning of Dumping, to analyze the Anti-Dumping laws of India and to analyze it's process of Investigation.

Type of Research
Analytical Type

Introduction
Antidumping is a process of preventing dumping in Indian market. It is the process of creating a barrier of selling products in low price from its actual price in other countries. The antidumping is a process of stopping illegally trading of products at low cost from its actual price in market.

The section 9A, 9AA, 9B of Custom Tariff Act, 1975 deals with the provision of antidumping and dumping in India. This article deals with the dumping and antidumping scenario in India, where Indian market is also dealing with the dumping problem such as, Chinese selling their goods in India with lesser price from its actual price of the products. These kinds of dumping practice are going on in India. The dumping is kind of an unseen crime.

Dumping generate many problems for domestic industries of India . The latest amendment of 2020 in the custom tariff act, 1975 has recently substituted of new section for section 8B which stated as power of central government to apply safeguards measures. The government of India is taking some safety measures for domestic industries of India against dumping problems going on from last decades.

What is the meaning of Dumping:

  1. Definition from Oxford Law Dictionary:
    The sale of goods abroad at prices below their normal value. Within the EU dumping regulations prohibit the sale of goods at below normal value. Countervailing (or antidumping) duties may be ordered on certain imported goods to prevent dumping.
     
  2. Definition from Mitra's Legal and Commercial Dictionary:
    Placing goods on the market in large quantities at unprofitable prices or prices lower than those charged elsewhere. (Anti-Dumping duties are imposed to limit or discourage the importation and sale of goods in unfair competition with home-produced goods.[5]
     
  3. Dumping according to GATT (General Agreement on Tariffs and Trade) / WTO (World Trade Organisation):
    Dumping is, in general, a situation of international price discrimination, where the price of a product when sold in the importing country is less than the price of that product in the market of the exporting country.

    Thus, in the simplest of cases, one identifies dumping simply by comparing prices in two markets. However, the situation is rarely, if ever, that simple, and in most cases it is necessary to undertake a series of complex analytical steps in order to determine the appropriate price in the market of the exporting country (known as the normal value) and the appropriate price in the market of the importing country (known as the export price) so as to be able to undertake an appropriate comparison.
     
 

What are provisions in India governing Anti-Dumping?

  1. Anti-dumping Duty (Section.9A of Custom Tariff Act, 1975):
    Where any article is exported from any country or territory (hereafter in this section referred to as the exporting country or territory) to India at less than its normal value, then, upon the importation of such article into India, the Central Government may, by notification in the Official Gazette, impose:
    1. if the article is not otherwise chargeable with duty under the provisions of this Act, a duty; or
    2. if the article is otherwise so chargeable, an additional duty, not exceeding the margin of dumping in relation to such article: not exceeding the margin of dumping in relation to such article:
      1. Sub- section (1) and (2) of section 9 shall stand amended as follows when section 2 of Act No. 52 of 1982 comes into force:
        1. Where any country or territory pays, or bestows, directly or indirectly, any bounty or subsidy upon the manufacture or production therein or the exportation therefrom of any article, then, upon the importation of any such article into India, whether the same is imported directly from the country of manufacture, production or otherwise, and whether it is imported in the same condition as when exported from the country of manufacture, production or has been changed in condition by manufacture, production or otherwise, the Central Government may, by notification in the Official Gazette, impose:
          1. if the article is not otherwise chargeable with duty under the provisions of this Act, a duty; or
             
          2. if the article is otherwise so chargeable, an additional duty, not exceeding the amount of such bounty or subsidy; Provided that the Central Government may, pending the determination in accordance with the provisions of this section and the rules made thereunder of the amount of such bounty or grant, impose a duty or additional duty under this sub- section not exceeding the amount of such bounty or subsidy as provisionally estimated by it and if such duty or additional duty exceeds such bounty or subsidy as so determined:
            1. the Central Government shall, having regard to such determination and as soon as may be after such determination, reduce such duty or additional duty; and
            2. refund shall be made of so much of such duty or additional duty which has been collected as is in excess of the duty of the duty or additional duty as so reduced.
              1. Subs. by Act 52 of 1982, s. 2 (w. e. f. 2- 9- 1985 ).
              2. Ins. by s. 3 ibid., (w. e. f. 2- 9- 1985 ).
              3. Ins. by Act 18 of 1992, s. 110.
              (b) in sub- section (2):
              1. for the words" no amount of any such bounty or grant", the words" amount of any such bounty or subsidy" shall be substituted;
              2. for the words" additional duty", the words" duty or additional duty, as the case may be," shall be substituted. Provided that the, Central Government may, pending the determination in accordance with the provisions of this section and the rules made thereunder of the normal value and the margin of dumping in relation to any article, impose on the importation of such article into India a duty or additional duty under this sub- section on the basis of a provisional estimate of such value and margin and if such duty or additional duty exceeds the margin as so determined:
                1. the Central Government shall, having regard to such determination and as soon as may be after such determination, reduce such duty or additional duty; and
                2. refund shall be made of so much of such duty or additional duty which has been collected as is in excess of such duty or additional duty as so reduced. Explanation. - For the purposes of this section:
                  1. margin of dumping, in relation to an article, means the difference between the price at which such article is exported and its normal value;
                  2. normal value, in relation to an article, means:
                    1. the comparable price in the ordinary course of trade for the said article or like article when meant for consumption in the exporting country or territory- as determined under sub- section (2); or
                    2. where such comparable price cannot be ascertained because of the particular market situation or for any other reason, such value shall be either:
                      1. the highest comparable price for the said article or like article from the exporting country or territory to any third country in the ordinary course of trade as determined under subsection (2); or
                      2. the cost of production of the said article or like article in the country of origin along with reasonable addition for selling and any other cost, and for profits, as determined under subsection (2).
                       
      2. Subject to any rules made under sub- section (3), the Central Government shall, after making due allowance in each case for differences in conditions and terms of sale, for differences in taxation and for other differences affecting price comparability, and, after such inquiry as it may consider necessary, determine, for the purposes of sub- section (1), the export price and the normal value of, and the margin of dumping in relation to, any article.
         
      3. The Central Government may, by notification in the Official Gazette, make rules for the purposes of this section, and without prejudice to the generality of the foregoing, such rules may provide for the manner in which articles liable for any duty or additional duty under sub- section (1) may be identified, and for the manner in which the export price and the normal value of, and the margin of dumping in relation to, such articles may be determined and for the assessment and collection of such duty or additional duty.
         
      4. Every notification issued under sub- section (1) shall, as soon as may be after it is issued, be laid before each House of Parliament.

     

Refund of Anti-dumping Duty in Certain Cases (Section.9AA of Custom Tariff Act, 1975):

  1. Where upon determination by an officer authorized in this behalf by the Central Government under clause (ii) of sub-section (2), an importer proves to the satisfaction of the Central Government that he has paid anti-dumping duty imposed under sub-section (1) of section 9A on any article, in excess of the actual margin of dumping in relation to such article, the Central Government shall, as soon as may be, reduce such anti-dumping duty as is in excess of actual margin of dumping so determined, in relation to such article or such importer, and such importer shall be entitled to refund of such excess duty:

    Provided that such importer shall not be entitled to refund of so much of such excess duty under this sub-section which is refundable under sub-section (2) of section 9A.

    Explanation: For the purposes of this sub-section, the expressions, margin of dumping, export price and normal value shall have the meanings respectively assigned to them in the Explanation to sub-section (1) of section 9A.
     
  2. The Central Government may, by notification in the Official Gazette, make rules to:
    1. provide for the manner in which and the time within which the importer may make application for the purposes of sub-section (1);
    2. authorize the officer of the Central Government who shall dispose of such application on behalf of the Central Government within the time specified in such rules; and
    3. provide the manner in which the excess duty referred to in sub-section (1) shall be:
      1. determined by the officer referred to in clause (ii); and
      2. refunded by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, after such determination.

No levy on Section 9 or Section 9A in Certain Cases (Section.9B of Custom Tariff Act, 1975):

  1. Notwithstanding anything contained in section 9 or section 9A:
    1. no article shall be subjected to both countervailing duty and anti-dumping duty to compensate for the same situation of dumping or export subsidization;
    2. the Central Government shall not levy any countervailing duty or anti-dumping duty:
      1. under section 9 or section 9A by reasons of exemption of such articles from duties or taxes borne by the like article when meant for consumption in the country of origin or exportation or by reasons of refund of such duties or taxes;
         
      2. under sub-section (1) of each of these sections, on the import into India of any article from a member country of the World Trade Organization or from a country with whom Government of India has a most favored nation agreement (hereinafter referred as a specified country), unless in accordance with the rules made under sub-section (2) of this section, a determination has been made that import of such article into India causes or threatens material injury to any established industry in India or materially retards the establishment of any industry in India; and
         
      3. under sub-section (2) of each of these sections, on import into India of any article from the specified countries unless in accordance with the rules made under subsection (2) of this section, a preliminary finding has been made of subsidy or dumping and consequent injury to domestic industry; and a further determination has also been made that a duty is necessary to prevent injury being caused during the investigation:

        Provided that nothing contained in sub-clauses (ii) and (iii) of clause (b) shall apply if a countervailing duty or an anti-dumping duty has been imposed on any article to prevent injury or threat of an injury to the domestic industry of a third country exporting the like articles to India;
         
    3. the Central Government may not levy:
      1. any countervailing duty under section 9, at any time, upon receipt of satisfactory voluntary undertakings from the Government of the exporting country or territory agreeing to eliminate or limit the subsidy or take other measures concerning its effect, or the exporter agreeing to revise the price of the article and if the Central Government is satisfied that the injurious effect of the subsidy is eliminated thereby;
         
      2. any anti-dumping duty under section 9A, at any time, upon receipt of satisfactory voluntary undertaking from any exporter to revise its prices or to cease exports to the area in question at dumped price and if the Central Government is satisfied that the injurious effect of dumping is eliminated by such action.
       
2.The Central Government may, by notification in the Official Gazette, make rules for the purposes of this section, and without prejudice to the generality of the foregoing, such rules may provide for the manner in which any investigation may be made for the purposes of this section, the factors to which regard shall be at in any such investigation and for all matters connected with such investigation.

What is the process of Anti-Dumping in India?

  • An application is filed by the domestic industry or DGAD (Directorate General of Anti-Dumping and Allied Duties) on its own cognizance
  • The proceedings begin and responses are invited from 50% domestic producers constituting the total domestic market.
  • Provisional anti-dumping duty is levied on the basis of preliminary findings.
  • Final findings are drawn on the basis of inspection of domestic industry and importers.
  • The final anti-dumping duty is levied on the exporting company.

The entire investigation process has to be concluded within 12 months from the date of filing the application. Anti-dumping rules also state that this period may be extended by the period of 6 months, limiting the time period to 18 months. An application for appeal can be filed against the final decision can be filed with the Customs, Excise and Service Tax Appellate Tribunal along with Rs. 15,000 within 90 days of final order.

The affected domestic industry can hire a corporate lawyer experienced in anti-dumping matters who can file the anti-dumping application for it.

What are the Advantages of Dumping?

  • The main advantage of dumping is selling at an unfairly competitive lower price. A country subsidizes the exporting businesses to enable them to sell below cost. The nation's leaders want to increase market share in that industry. It may want to create jobs for its residents. It often uses dumping as an attack on its trading partner's industry. It hopes to put that country's producers out of business and become the industry leader.
  • There is also a temporary advantage to consumers in the country being dumped upon. As long as the subsidy continues, they pay lower prices for that commodity.
     

Disadvantages of Dumping?

  • The problem with dumping is that it's expensive to maintain. It can take years of exporting cheap goods to put the competitors out of business. Meanwhile, the cost of subsidies can add to the export country's sovereign debt.
  • The second disadvantage is retaliation by the trading partner. Countries may impose trade restrictions and tariffs to counteract dumping. That could lead to a trade war.
  • The third is censure by international trade organizations. These include the World Trade Organization and the European Union.

Conclusion
Anti dumping, in common parlance, is understood as a measure of protection for domestic industry. However, anti dumping measures do not provide protection by it self to the domestic industry. It only serves the purpose of providing remedy to the domestic industry against the injury caused by the unfair trade practice of dumping. In fact, anti dumping is a trade remedial measure to counteract the trade distortion caused by dumping and the consequential injury to the domestic industry. Only in this sense, it can be seen as a protective measure.

Reference
Webliography:
  • https://www.wto.org/english/res_e/booksp_e/gatt_ai_e/art6_e.pdf
  • https://cleartax.in/g/terms/dumping#:~:text=Dumping%20is%20an%20international%20trade,domestic%20market%20of%20the%20exporter.
  • http://antidumpinglaws.com/content.php?id=Anti-dumping%20Provisions#:
  • https://www.investopedia.com/terms/a/anti-dumping-duty.asp
  • https://www.researchgate.net/publication/233143525_Trade_Effects_of_Anti-dumping_in_India_Who_Benefits

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