India Slaps First Anti-Subsidy Duty of 13.44% on Castings for Wind
Electricity Generators from China
• The
Designated Authority for Anti-Subsidy slapped a stiff 13.4% anti subsidy duty, known
as CVD in international parlance, on castings from China. A notification of
this affect was released on 19.01.2016. Only Zhejiang Jiali
Co. operated so it was subjected to 8.78% duty. The CVD will apply on landed
value, that is, value of goods plus basic duty. The duty is vated
for five years.
• On
the spot verification of the information/data/evidences furnished and claims
made by the Govt of China as well as Zhejiang Jiali Chinese producer/exporter could not be carried out.
• The
petition was filed by Larsen & Toubro Limited whose production constitutes
more than 50% of Indian production. M/s Patel Alloys Steels Pvt.
Limited has supported the petition. Data showed the companies were
losing capacity utilization due to competition and also falling demand.
• Govt of China says petition is
only copy/paste from WTO case. No specific data generated
• Almost
50 exporters of product concerned in China but only one came forward.
• 7
major categories of subsidies containing in total 44 subsidy programmes. But, petitioner
could not identify which specific subsidy programs is related to the product
under investigation and whether these programs existed and financial benefit
conferred in the sector within which the exporting producers fall.
• MNRE
estimates total demand of casting components of WOEG will be 7,00,000 MT by 2022 as against the local manufacturing
capacity of 90,000 tonne/annum from L&T and Patel Aloys
only.
• MNRE
has set an ambitious target of 60 GW capacity installation by 2022.
Accordingly, the demand for the casting components would increase manifold.
• Domestic
manufacturing companies may have the capacity to meet the required demand, but
quality of the products needs to be ensured.
A. Grants
B. Equity Programs
C. Preferential Loans
D. Preferential Income Tax Programs
E. Relief from Duties and Taxes on Materials and
Machinery
F. Goods/Services Provided by Government at Less
than Fair Market Value
Export
Subsidies included in Finding
|
Provision of input
materials and utilities for less than adequate remuneration |
Program No. 43 |
Provision of various
goods for less than adequate remuneration |
8.12 |
8.12 |
|
Preferential Income Tax
Programs & Tax Incentives |
Program No. 25 |
Preferential Tax Policies
for FIEs and Foreign Enterprises |
- |
2.13 |
|
Grants |
Program No. 8 |
The State Key Technology
Renovation Projects Fund |
1.99 |
1.99 |
|
Total Subsidy Margin as
a % of landed value |
11.18 |
13.44 |
||
Key
Data
|
Demand |
Unit |
2010-11 |
2011-12 |
2012-13 |
POI* |
|
Sales of Domestic
Industry (CMU & KBL of L&T) |
MT |
14,122 |
8,079 |
5,133 |
6,888 |
|
Sales of Other Indian
Producers |
MT |
7,310 |
7,368 |
3,076 |
3,364 |
|
Subject country- Imports |
MT |
4,486 |
15,117 |
10,430 |
14,245 |
|
Other Countries- Imports |
MT |
591 |
1661 |
502 |
214 |
|
Total demand/
consumption |
MT |
26,509 |
32,225 |
19,141 |
24,711 |
POI*- Oct’ 2012-
Dec’ 2013 (15 Months)
|
Price Undercutting |
% |
*** |
*** |
*** |
*** |
|
Price Undercutting Range
|
% |
40-50 |
50-60 |
10-20 |
0-10 |
• Comments by Indian Wind Turbine
Manufacturers Association (WTMA)
Domestic
manufacturing of complete item affected with confusion in castings segment of
supply chain.
• Comments by GE India
Industrial Private Limited and Inox Wind Ltd
i. Designated Authority has failed to adequately
disclose the essential facts of the investigation, especially those concerning casual link. Authority must issue a fresh disclosure
statement in order to fulfill its obligations by
giving sufficient time to respond to the same.
ii. Authority’s
observation that the impact of the countervailing measures is hardly 0.1%
increase in costs to a consumer is inaccurate. The logistical inefficiencies
such as the costly supply chain model have a great impact on the cost of
purchase from the domestic industry. L&T is unable to produce the product
with the necessary technical specifications depending on the consumer
preference is the important factor due to which the Importer had to import the
subject goods.
iii. The
market share of the imports from the subject country increased irrespective of
a decrease in the market share of the domestic industry. Therefore, injury
faced by the domestic industry cannot be attributed to the increase in imports.
Notification Text
[Customs Notification 01 (CVD) dated 19th January 2016]
Seeks to levy definitive countervailing duty on import of Castings
for wind-operated electricity generators whether or not machined, in raw,
finished or sub-assembled form, or as a part of a sub-assembly, or as a part of
an equipment/ component meant for wind-operated electricity generators
originating in, or exported from the People's Republic of China for a period of
five years.
Whereas, in the matter of ‘Castings for
wind-operated electricity generators
whether or not machined, in raw, finished or sub-assembled form, or as
a part of a sub- assembly, or
as a part of an equipment/ component meant for
wind-operated electricity generators’ (hereinafter referred
to as the subject goods)
falling under tariff items 8483 40 00, 8503 00 10 or 8503 00 90 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), hereinafter referred to as the Customs Tariff Act, originating in or exported from, People’s
Republic of China (hereinafter referred to as the subject country), and imported into India, the designated authority in its final findings, published in the Gazette of
India, Extraordinary, Part
I, Section 1, vide notification No.
17/6/2013-DGAD, dated the 27th November, 2015
has come to the conclusion that-
(i) the subject goods have been exported to India from subject country at subsidized value, thus resulting in subsidization of
the
product;
(ii) the domestic industry has suffered material injury due to subsidization of
the subject goods;
(iii) the material injury has been caused by the subsidized imports of the subject goods originating in or
exported from the subject country;
and has recommended the imposition of definitive countervailing duty on imports of
the subject goods
originating in, or
exported, from the subject country,
Now, therefore, in exercise of
the
powers conferred by sub-sections (1) and
(6) of section 9
of the Customs Tariff Act, read
with rules 20 and
22 of the Customs Tariff
(Identification, Assessment and Collection of Countervailing Duty on
Subsidized Articles and for Determination of
Injury) Rules, 1995,
the
Central Government, after considering the aforesaid final findings of
the
designated authority, hereby imposes on the subject goods, the
description of which is specified in column (3)
of the Table below, falling under tariff items
of the First Schedule to the Customs Tariff Act as specified in the corresponding entry in
column (2),
originating in the countries as specified in the corresponding entry in column
(4), exported from the countries as specified in the corresponding entry in column (5), produced by the producers as specified in the corresponding entry in column (6), exported by the exporters as specified in the corresponding entry in column (7), and
imported into India, countervailing duty at the rate to be worked out as percentage of the landed value of
imports
of the subject goods as specified in the corresponding entry in column (8) of the said Table, namely:-
|
Table |
|||||||
|
SNo |
Tariff item |
Description
of goods |
Country of
origin |
Country of
export |
Producer |
Exporter |
Percentage of
landed value |
|
(1) |
(2) |
(3) |
(4) |
(5) |
(6) |
(7) |
(8) |
|
1 |
8483 40 00, 8503 00 10 or 8503 00 90 |
Castings for wind-
operated electricity generators, whether or not
machined, in raw, finished or sub- assembled form, or
as a part of a sub- assembly, or
as a part of an equipment/ component meant for
wind-operated electricity generators |
People’s Republic of China |
People’s Republic of China |
Zhejiang Jiali Wind Power Technology Company Limited |
Zhejiang Jiali Wind Power Technology
Company Limited |
8.78 |
|
2 |
-do- |
-do- |
People’s Republic of China |
People’s Republic of China |
Any |
Any |
13.44 |
|
3 |
-do- |
-do- |
People’s Republic of China |
Any country |
Any |
Any |
13.44 |
|
4 |
-do- |
-do- |
Any country |
People’s Republic of China |
Any |
Any |
13.44 |
2. The countervailing duty imposed under this notification shall be levied for a period of five years (unless revoked,
superseded or amended
earlier) from the date of
publication of this notification in the Official Gazette and shall be payable in Indian currency.
Explanation.- For the purposes of this notification, "landed
value" shall be the assessable value as determined under
the Customs Act 1962, (52 of 1962) and all duties of
customs except duties levied under sections 3,
3A, 8B, 9 and 9A of the Customs Tariff Act.
[F. No.
354/84/2015-TRU]