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Anti-Dumping Duty

Anti-Dumping Duty India

Anti-Dumping Duty India

Dumping, in business parlance, means the exporting of a company’s goods at a price which is lower than the average selling price in the domestic market. Anti-dumping duty was introduced with the objective of curbing the ill effects caused by dumping on domestic industries, as well as to promote and establish fair trade. This article examines the fundamental aspects of anti-dumping duty in India.

Normal Customs Duty vs Anti-Dumping Duty

Both the customs and anti-dumping duties are imposed and collected by the Customs Authorities, but the similarities end here. The following are the differences between them:

  • While anti-dumping measures are linked with the notion of fair trade, customs duties aim at the overall development of the economy.
  • Customs duties fall under the ambit of trade and fiscal policies of the Government, whereas anti-dumping is a remedial measure.
  • Anti-dumping is implemented to offset the injurious effect of international price discrimination, while customs duties have implications for the government revenue and the overall development of the economy.
  • Anti-dumping measures may not necessarily be in the form of duties/tax.
  • Anti-dumping duties are imposed against exporter/country inasmuch as they are country specific and exporter specific, in contrast to customs duties which are universally applicable to all imports irrespective of the country of origin or the exporter.

The anti-dumping measure has received its nod of approval from the World Trade Organization. One among the many objectives of the organization is the international regulation of anti-dumping measures. The WTO agreement permits governments to act against dumping in scenarios where there is genuine injury to the competing domestic industry. In some other cases, the organization intervenes to prevent the implementation of the measure.

Dumping of Goods

Dumping occurs when the export price is lower than the normal price.  Considering this, the two parameters used for determining dumping are export price and normal price. To assess dumping, both these elements have to be compared at the same level of trade.

Initiating Anti-Dumping Investigation

Anti-dumping investigation can be conducted if the following conditions are satisfied:

  • There is sufficient evidence to prove the existence of dumping. Dumping exists if there is adverse impact on the domestic industry, and the dumped imports led to the alleged adverse impact on domestic industry.
  • The domestic producers expressly supporting the anti-dumping application must account for at-least 25% of the total production of a similar article by the domestic industry.

Anti-dumping and anti-subsidies are administered by the Directorate General of Anti-Dumping and Allied Duties (DGAD), which is operated by the Ministry of Commerce and Industry, and headed by the “Designated Authority”.  The Department of Commerce recommends the Anti-dumping duty, and the Ministry of Finance levies it.

Making of Application

In case you believe an industry is adversely impacted by dumping, application can be made on behalf of the concerned domestic industry for an investigation. They must account for more than 25% of the total domestic production of the similar article in question.

The application is deemed to have been made on or behalf of the domestic industry, if it is supported by domestic producers whose collective output contributes to more than 50% of the total production of the similar article produced by the particular portion of the domestic industry expressing their support or opposition to the condition.

Anti-Dumping Duty Application

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