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Fixed $-denominated dutyimposed on SBR imports

K.R. Srivats

NEW DELHI, May 28

THE Finance Ministry has retracted from its earlier decision to impose a variable dollar-denominated definitive anti-dumping duty on Styrene Butadiene Rubber (SBR) from the US, Taiwan, Turkey, South Korea and Japan.

Just a few days after levying a variable anti-dumping duty in dollar terms, the Revenue Department has now imposed a `fixed' (read unalterable) dollar-denominated anti-dumping duty on SBR imports from these countries as part of its effort to comply with the ruling made by Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT) in February.

CEGAT had then held that the anti-dumping duty on various grades of SBR be imposed in US dollar terms to ensure that the effect of the anti-dumping duty does not get eroded on account of changes in the exchange rate of rupee vis-a-vis dollar.

In its interpretation of the CEGAT's order, which was termed as `ambiguous' by official sources, the Revenue Department held that imports of SBR from the US, Taiwan, Turkey, South Korea and Japan would attract variable dollar-denominated anti-dumping dut y. The department's notification, on May 22, mentioned that the variable anti-dumping duty rates will be computed as a difference between the dollar-denominated rates specified by the CEGAT order and the ``landed value'' of imported SBR per metric tonne.

The Revenue Department's notification caused quite a stir amongst the domestic tyre industry (a significant consumer of SBR) which was all along expecting the department to clamp a `fixed'' (read unalterable) dollar-denominated anti-dumping duty as ruled by CEGAT. A clarification was immediately sought on the intent and the implications of the Finance Ministry's decision.

Retracting from its earlier decision, the Revenue Department on Friday issued a corrigendum, which is yet to be Gazetted, stating that anti-dumping duty at a ``rate equivalent to'' the rates specified in the CEGAT order be imposed as the definitive anti- dumping duty on SBR imports from the US, Taiwan, Turkey, South Korea and Japan.

The CEGAT order had stated that the anti-dumping duty suggested by the Designated Authority (which had recommended a variable anti-dumping duty in rupee terms) on various grades of SBR has been `re-fixed' as dollar-denominated rates. It was felt that the order had given room to an interpretation that the rates fixed by CEGAT were only replacing (in dollar terms) the rupee-denominated rates recommended by the Designated Authority and were not essentially ``fixed rates'' (read unalterable).