Anti-dumping duty is a measure to rectify the
situation arising out of the dumping of goods
and its distorting effect on domestic producers
of similar goods.
The
concept of dumping and subsidisation has long
been known. Rapid industrialisation has resulted
in large-scale production – and in this
situation dumping enables the producer to
establish a dominant position in the market.
‘Dumping’ is when an exporter sells their
products to another country at a price less than
the price prevailing in their domestic market.
It
is common in international commercial practice
for export prices to be lower than the domestic
ones so there is, as such, nothing inherently
illegal or immoral about the practice of
dumping. However, when dumping causes or
threatens to cause, material injury to the
domestic industry it is viewed seriously.
The
effect of dumping has been felt by India’s
domestic industries recently with the removal of
‘quantitative restriction’ and lowering of
custom duty.
Indian laws were amended with effect from 1
January 1995 to bring them in line with the
provisions of the respective GATT agreements.
Sections 9A, 9B and 9C of the Customs Tariff Act
1975 as amended in 1995 and the Customs Tariff
(Identification, Assessment and Collection of
Anti-dumping Duty on Dumped Articles and for
Determination of Injury) Rules 1995, form the
legal basis for anti-dumping investigations and
imposition of duty.
LEX
Nexus advice on all aspects of indirect and
direct tax.
