Fiberboards from Five Countries (Indonesia, Malaysia, Sri Lanka,
Thailand and Vietnam) under Anti-subsidy Investigation on Complaint of
Greenply/ Greenpanel Inds., Century Plyboards and Rushil Décor
[DGTR Initiation Notification Case No. O1
(CVD)- 6/2019 dated 5 November 2019]
Subject: Initiation
of Anti-Subsidy Investigation concerning imports of Fiberboards from Indonesia,
Malaysia, Sri Lanka, Thailand and Vietnam.
F.No.
6/17//2019- DGTR: Whereas Greenply Industries Limited/ Greenpanel Industries
Limited, Century Plyboards (India) Ltd. and Rushil Decor Limited (hereinafter
referred to as "petitioners" or "Domestic industry") have
filed an application on behalf of Domestic industry before the Designated
Authority, in accordance with the Customs Tariff Act 1975, as amended from time
to time (hereinafter referred to as the Act) and the Customs Tariff
(Identification, Assessment and Collection of Countervailing Duty on Subsidized
Articles and determination of injury) Rules, 1995, as amended from time to
time, (hereinafter referred to as the Rules), alleging subsidization of
Fiberboards (hereinafter referred to as the subject goods), from Indonesia,
Malaysia, Sri Lanka, Thailand and Vietnam (hereinafter referred to as the
subject countries) and requested for initiation of an anti-subsidy
investigation for levy of countervailing duties on the imports of the subject
goods, originating in or exported from the subject countries.
A. Allegation of Subsidization
2.
The petitioners have alleged that the producers/exporters of the subject goods
in the subject countries have benefitted from the actionable subsidies provided
at various levels by the Governments of the subject countries, including the
government of different provinces and Municipalities in which
producers/exporters are located, and other 'Public bodies'. The petitioners
have relied upon the relevant Laws, Rules and Regulations and other
Notifications of the relevant Government Agencies and Public Bodies as
available in the public domain and in the determination of other investigating
Authorities who had conducted comprehensive investigation of such schemes and
concluded existence of countervailable subsidy programs.
B. Consultation
In
terms of Article 13 of Agreement on Subsidies and Countervailing Measures
(ASCM), invitations for pre-initiation consultations were sent to the
Government of Indonesia, Government of Malaysia, Government of Sri Lanka,
Government of Thailand and Government of Vietnam. While consultations were held
with the Government of Malaysia (GoM), Government of Indonesia (Gol) and
Government of Vietnam (GoV) on 9th, 10th and 11th October 2019 respectively,
the Government of Thailand did not avail the opportunity for consultations. The
written submission of representatives of the responding Government of subject
countries have been taken on record.
C.
Subsidy Programs
3.
The prima facie evidence provided by the petitioners shows that the producers
and exporters of the subject goods in the subject countries have benefitted
from a number of subsidy schemes/programs, granted by the Government of
respective subject countries and/or their respective public bodies as listed
below-
a.
Schemes by Government of Indonesia-
i.
Program 1: Provision of Standing Timber
for Less Than Adequate Remuneration
ii.
Program 2: Government prohibition of
Log exports
iii.
Program 3: Benefits for export
facilitation by Indonesia EXIM Bank
iv.
Program 4: Reduction of lncome tax
v.
Program 5: Exemption of import duty
vi.
Program 6: Exemption of import duty -
Raw materials
vii.
Program 7: Exemption of VAT
viii.
Program 8: Accelerated depreciation or
amortization
ix.
Program 9: Relief from Land and
Building tax
b.
Schemes by Government of Malaysia-
i.
Program No.1: The Market Development grant
ii.
Program No.2: Export Credit Refinancing
iii.
Program No 3: Buyer Credit Guarantee
iv.
Program No.4: Pioneer Status
v.
Program No.5: Investment Tax Policies
vi.
Program No.6: Reinvestment Allowance
vii.
Program No.7: Accelerated Capital
Allowance
viii.
Program No.8: Tariff Related Incentives
ix.
Program No.9: Allowance for plants and
Machinery
x.
Program No.10: Incentives for
manufacturing and manufacturing related services in East Coast Economic
Corridor
xi.
Program No. 11: Draw back on Import
duty, Sales tax and Excise duty
xii.
Program No.l2: Sales Tax Exemption
xiii.
Program No.l3: Exemption from Import Duty on Raw Materials/Components
xiv.
Program No.14: Double Deduction for
Promotion of Exports
xv.
Program No.l6: Incentives for Small and
Medium Enterprises
xvi.
Program No.17: Allowance for Increased Export
xvii.
Program No.18: Tax Exemptions for
Exporters in Free Trade Zones
c.
Schemes by Government of Sri Lanka -
i.
Program No 1: National Building
Tax exemption (Indirect Tax)
ii.
Program No 2: Exemptions for custom
duties on Capital and Intermediate Goods
iii.
Program No 3: Income Tax Concessions
for Specified undertakings
iv.
Program No 4: Income tax exemptions for
undertakings with high Investment
v.
Program No 5: National Fertilizer
Subsidy Scheme
vi.
Program No 6: Subsidies for Rubber
plantation
d.
Schemes by Government of Thailand -
i.
Program No 1: Exemption/reduction of
import duties on machinery
ii.
Program No. 2: Exemption of import duty
on raw material imported for use in production for export
iii.
Program No 3: Reduction of import duty
for raw or essential materials
iv.
Program No 4: Exemption of Corporate
Income Tax for BOI-Promoted Activities
v.
Program No 5: Reduction of lncome tax
in Investment Promotion Zones
vi.
Program No. 6: Additional 25 percent
deduction of the cost of installation or construction of facilities
vii.
Program No 7: Double deduction
available for companies in Investment Promotion Zones
viii.
Program No 8: Exemption of Income Tax -
Dividends
ix.
Program No. 9: VAT exemption on exports
x.
Program No. 10: Short term Export
Credit Insurance
xi.
Program No. 11: Medium and Long term
Export credit Insurance
e.
Schemes by Government of Vietnam-
i.
Program No 1: Import Duty Exemptions on
Imports of Raw Materials for Exporting Goods
ii.
Program No 2: Import Duty Exemptions on
Imported Raw Materials in nontariff zones
iii.
Program No 3: Import Duty Exemption on
Imports of Spare Parts and Accessories for Companies in Industrial Zones
iv.
Program No 4: Reduction of Corporate
Income tax
v.
Program No 5: Exemption or Reduction of
Import tax
vi.
Program No.6: Exemption and Reduction
of Land & Water
rent
vii.
Program No 8: Investment Credit by
Vietnam Development Bank
viii.
Program No 9: Export Credit by Vietnam
Development Bank
4.
It has
been alleged that the above schemes are actional subsidies since they involve a
financial contribution from the Governments of the respective subject countries
or other regional or local Governments of such respective countries, including
public bodies and confer benefit on the recipient (s). They are also alleged to
be limited to certain enterprises or groups of enterprises and/or products
and/or regions and therefore specific and countervailable. They are also in
some cases alleged to be contingent upon the use of domestic over imported
goods and/or contingent upon export performance.
5.
The Designated Authority reserves the right to investigate other subsidies,
which may be found to exist and availed by the producers and exporters of the
subject goods, during the course of investigation.
D.
Allegation of Injury and Casual Link
6.
The petitioners have furnished information on various parameters relating to
'injury' to the domestic industry as prescribed under the Rules. The evidence
provided by the petitioner's prima facie shows material injury to the domestic
industry has been caused by the alleged subsidized imports from the subject
countries.
E. Initiation of the Investigation
7.
The Authority finds that there is prima facie evidence of existence of
countervailable subsidies on production and export of the subject goods in the
subject countries and such subsidized imports are causing material injury to
the domestic industry through their volume and price effects.
8.
In view of the above position, the Authority hereby initiates an investigation into
the alleged subsidization and consequent material injury to the domestic industry
in terms of Rule 6 of the Rules supra, to determine the existence, degree and
effect of alleged subsidization and to recommend the amount of countervailing
duty, which if levied, would be adequate to remove the injury to the domestic
industry.
F. Domestic Industry
9.
The application has been filed by Greenply Industries Limited/ Greenpanel
Industries Limited, Century Plyboards (India) Ltd. and Rushil Decor Limited, as
per the evidence available on record, production of the petitioners accounts
for major proportion of the total domestic production. The Authority,
therefore, determines that the constituent of domestic producers in the present
application constitute domestic industry within the meaning of Rules 2(b) and
the application satisfies the criteria of standing in terms of Rules 6(3) of the
Rules supra.
G. Product Under Consideration
10.
The product under consideration (PUC) in the present investigation is
"Fibre board of wood or other ligneous materials, whether or not bonded
with resins or other organic substances" (hereinafter referred to as
subject goods).
11.
Fibreboards is a type of engineered wood product that is made out of wood
fibers. Types of fibreboard include medium-density fiberboard (MDF) and
hardboard (high-density fiberboard, HDF).
12.
The product is classified under heading 44.11 of the First Schedule to the
Customs Tariff Act, 1975 (51 of 1975). The scope of the product under
consideration is the products classifiable under following HS codes:
4411 |
Fibre
board of wood or other ligneous materials, whether or not bonded with |
|
-
Medium density fibre board (MDF) |
4411
12 |
--Of
a thickness not exceeding 5mm |
4411
13 |
--
Of a thickness exceeding 5mm but not exceeding 9rnm |
4411
14 |
--
Of a thickness exceeding 9rnm |
|
-
Other: |
4411
92 |
--Of
a density exceeding 0.8 grn/cm3 |
4411
93 |
--Of
a density exceeding 0.5 gm/cm 3 but not exceeding 0.8 gm/cm 3 |
4411
94 |
--Of
a density not exceeding 0.5 gm/cm |
13.
The PUC covers both HDF and MDF in laminated and non-laminated forms. The
delineation of the PUC with respect to thickness/weight parameters is done
under the relevant ITC (HS) as stated above.
14. The Authority proposes to
consider the PUC as per the following PCNs:
4411
12 |
MDF
of a thickness not exceeding 5mm |
4411
13, 4411 93 |
MDF
of a thickness exceeding 5mm but not exceeding 9mm and of a density exceeding
0.5 gm/cm3 but not exceeding 0.8 gm/cm3 |
4411
14 |
MDF
of a thickness exceeding 9mm |
4411
92 |
HDF
of a density exceeding 0.8 gm/cm3 |
15.
The interested parties are requested to furnish their comments on the proposed
PCNs within 15 days from the date of this notification.
16.
Following are excluded from the scope of the product under consideration-
a)
Flooring boards
b)
Sunmica
c)
Insulation board d) Coir boards
e)
Jute fibre board
H.
Like Article
17.
The petitioners have claimed that the goods produced by the domestic industry
are like articles to the subject goods originating in or exported from the
subject countries. It has been stated that there is no significant difference in
the subject goods produced by the petitioners and those exported from subject
countries. The petitioners claim that the two are technically and commercially substitutable.
For the purpose of present investigation, the subject goods produced by the
domestic industry are being treated as 'like articles' of the subject goods
imported from the subject countries.
I. Countries
Involved
18.
The countries involved for the purpose of current investigation are Indonesia,
Malaysia, Sri Lanka, Thailand and Vietnam.
J.
Period of Investigation
19.
The period of investigation (POI) in the present investigation is April 2018 to
March, 2019 (12 months). The injury investigation period will however cover the
periods 2015-16, 2016-17, 2017-18 and the POI.
K.
Procedure & Submission of Information
20.
The exporters in the subject countries, importers and users in India known to
be concerned with the product and the domestic industry are being informed
separately to enable them to provide all information relevant in the form and
manner prescribed. Any other party interested to participate in the present
investigation may also write to:
The Designated Authority
Directorate General of Trade Remedies Department of Commerce
Ministry of Commerce & Industry
4th Floor, Jeevan Tara Building,
5 Parliament Street, New Delhi
-110001
21.
As per Rule 7(5) of the Rules supra, the Designated Authority is also providing
opportunity to the industrial users of the product under investigation, and to
represent consumer organizations who can furnish information which is relevant
to the investigation regarding subsidy, injury and casual link. Any other
interested party may also make its submissions relevant to the investigation
within the time limits set out below.
L.
Time Limit
22.
Any information relating to the present investigation should be sent in writing
so as to reach the Authority at the address mentioned above not later than 40
(forty) days from the date of publication of this notification. The Government
of subject countries, known exporters and importers, who are being addressed
separately, are however required to submit the response to questionnaire within
40 (forty) days from the date of publication of this notification. If no
information is received within the prescribed time limit or the submitted
information is incomplete, the Authority may record its findings on the basis
of the facts available on record in accordance with the Rules.
M.
Submission of Information on Non-Confidential basis
23.
In terms of Rule 8 of the Rules, the interested parties are required to submit
non-confidential version of any confidential information provided to the
Authority. In case confidentiality is claimed on any part of the questionnaire's
response/submissions, the same must be submitted in two separate sets (a)
marked as Confidential (with title, index, number of pages, etc.) and (b) other
set marked as Non-Confidential (with title, index, number of pages, etc.). All
the information supplied must be clearly marked as either
"confidential" or "non-confidential" at the top of each
page.
24.
Information supplied without any mark as "Confidential" shall be
treated as non- confidential and the Authority shall be at liberty to allow the
other interested parties to inspect any such non-confidential information. Two
(2) copies each of the confidential version and the nonconfidential version
must be submitted.
25.
For information claimed as confidential; the supplier of the information is
required to provide a good cause statement along with the supplied information
as to why such information cannot be disclosed and/or why summarization of such
information is not possible.
26.
The non- confidential version is required to be a replica of the confidential version
with the confidential information preferably indexed or blanked I summarized depending upon the information on which
confidentiality is claimed. The non-confidential summary must be in sufficient
detail to permit a reasonable understanding of the substance of the information
furnished on confidential basis. However, in exceptional circumstances, party
submitting the confidential information may indicate that such information is
not susceptible to summary; a statement of reasons why summarization is not
possible, must be provided to the satisfaction of the Authority.
27.
The Authority may accept or reject the request for confidentiality on
examination of the nature of the information submitted. If the Authority is
satisfied that the request for confidentiality is not warranted or the supplier
of the information is either unwilling to make the information public or to
authorize its disclosure in generalized or summary form, it may disregard such
information.
28.
Any submission made without a meaningful non-confidential version thereof or
without a good cause statement on the confidentiality claim may not be taken on
record by the Authority. The Authority on being satisfied and accepting the
need for confidentiality of the information provided; shall not disclose it to
any party without specific authorization of the party providing such
confidential information.
N.
Non cooperation
29.
In terms of Rule 7(8), in case where an interested party refuses access to or
does not provide necessary information within a reasonable period, or
significantly impedes the investigation, the Authority may record its findings
on the basis of the facts available to it and make such recommendations to the
Central Government as deemed fit.
0.
Inspection of Public File
30.
In terms of Rule 7(7), any interested party may inspect the public file containing
nonconfidential version of the evidence submitted by other interested parties.