Welded Stainless Steel Pipes and Tubes
from China and Vietnam in Anti-subsidy Net – Investigation Initiated
on Complaint of Stainless Steel Pipe and Tubes
Manufacturer Association
[Initiation
Notification [Case No. OI- 08/2018] dated 9 August 2018]
Subject:
Initiation of Countervailing Duty/
Anti-subsidy investigation concerning imports of Welded Stainless Steel Pipes
and Tubes originating in or exported from China PR and Vietnam.
F. No.6/22/2018- DGAD:
Whereas Stainless Steel Pipe And Tubes Manufacturer Association, New Delhi and
Stainless Steel Pipes & Tubes Manufacturers Association, Ahmedabad, South
India Stainless Steel Pipe And Tubes Manufacturer Association and Haryana
Stainless Steel Pipe And Tube manufacturer Association have jointly filed a hereinafter
referred to as the applicants or petitioners) filed an application before the
Designated Authority (hereinafter referred to as the “Authority”), on behalf of
the domestic industry, in accordance with the Customs Tariff Act 1975, as
amended from time to time (hereinafter referred to as the Act) and Customs
Tariff (Identification, Assessment and Collection of Countervailing Duty on
Subsidized Articles and for Determination of Injury) Rules, 1995, as amended
from time to time, (hereinafter referred to as the Rules), alleging
subsidization of certain Welded Stainless Steel Pipes and tubes (hereinafter
referred to as the subject goods), from People’s Republic of China, 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 the subject countries.
A.
Allegation of subsidization
2.
The applicants have alleged that the producers/exporters of the subject goods
in the subject countries have benefited from the actionable subsidies provided
by various levels in the Government of China and Vietnam, including the
Governments of the different Provinces and Municipalities in which the
producers/exporters are located, and other ‘Public Bodies’. The applicants have
relied upon the relevant Laws, Rules and Regulations and other Notification of
the relevant Government Agencies and Public Bodies as available in the public
domain and in the determinations of other investigating Authorities who have
conducted comprehensive investigation of such schemes and concluded existence
of countervailable subsidy programs.
B.
Consultation
3.
In terms of Article 13 of ASCM pre-initiation consultations were held with the
representatives of the Government of the People’s Republic of China on 27th
June, 2018 and with the representatives
of the Government of Vietnam on 6th July 2018. The comments of the Govt. of People’s
Republic of China & Vietnam have been taken on record.
C.
Subsidy Programs
4.
The prima facie evidence provided by the applicants
shows that the producers and exporters of the subject goods in the subject
countries have benefited from a number of subsidies granted by the Government
and/or other public bodies of the subject countries as listed below.
I. Identified
Programs in the form of Grants:
Program
No. 2: Famous Brands Program
Program
No. 3: Direct Government Grants given by Jiangsu Province
Program
No. 4: Grants for Antidumping Investigations
Program
No. 5:- Superstar Enterprise Grant
Program
No. 6: Research & Development (R&D) Assistance Grant
Program
No. 7: Export Assistance Grant
Program
No. 8: Grants to Baoshan Steel
Program
No. 9: Grants for Listing Shares
Program
No. 10: Funds for Outward Expansion of Industries in Guangdong Province.
Program
No. 11: Grants provided through the Provincial Fund for Fiscal and
Technological Innovation.
Program
No. 12: Various grants provided to Shandong Province
a)
Program No. 12 (a): Shandong Province's Special Fund for the Establishment of
Key Enterprise Technology Centers
b)
Program No. 12 (b): Shandong Province's Award Fund for Industrialization of Key
Energy-Saving Technology
c)
Program No. 12 (c): Shandong Province's Environmental Protection Industry
Research and Development Funds
d)
Program No. 12 (d): Shandong Province's Construction Fund for Promotion of Key
Industries
Program
No. 14 : Grants provided by Hebei Province
a.
Grants under the Science and Technology program of Hebei Province b. Government
of Shijiazhuang City Export Award
Program
No. 15: Various grants provided to Fuyang City
a.
Grant for Enterprises Paying Over RMB 10 Million in Taxes b. Grants under the
Export of Sub-Contract Services Program c. Grants under Excellent New
Products/Technology Award
d.
Investment grants from Fuyang City Government for key
industries
e.
Grants for Enterprises Operating Technology and Research and Development
Centers
f. Local and Provincial Government Reimbursement
Grants on export Credit Insurance Fees
g.
Initial Public Offering (IPO) Grants from the Hangzhou Prefecture and the City
of Fuyang (Zhejiang Province) & (Anhui Province)
Program
No. 16 : Grant - Special Funds for Fostering Stable
Growth of Foreign Trade
Program
No. 18: Provincial Government - Equipment Grant
Program
No. 19 :Treasury Bonds Loans or Grants
Program
No. 20 : Interim Measures of Fund Management of
Allowance for Zhongsham Enterprises to Attend
Domestic and Overseas Fair
Program
No. 21: International Market Fund for Export Companies Program No.
22:
Special Fund for Energy Saving Technology Reform
Program
No. 23: Small and Medium-sized Enterprise Support Funds
Program
No. 24: Subsidies Provided in Tianjin Binhai New Area
and the Tianjin Economic and Technological Development Area
Program
No. 25: State Special Fund for Promoting Key Industries and Innovation
Technologies
II.
Identified Programs in the Form of Export Financing and Export Credit
Program
No. 26: Export Seller's Credit
Program
No. 27: Export Buyer's Credit
Program
No. 28 : Other Export Financing from State-Owned Banks
III. Identified Programs in the Form of Tax &
VAT Incentives
Program
No. 29 : Income Tax Refund for Re-investment of FIE
Profits by Foreign Investors
Program
No. 30 : Reduced Tax Rate for Productive FIEs
Scheduled to operate for a Period not Less than 10 Years (Two Free, Three Half)
Program
No. 31 : Income Tax Reduction for Advanced Technology
FIEs
Program
No. 32 : Preferential Tax Policies for FIEs and
Foreign Enterprises and Certain Domestically-Owned Companies Which Have
Establishments or Places in China and are Engaged in Production or Business
Operations Purchasing Domestically Produced Equipment’s
Program
No. 33 : Tax Policies for the deduction of research
and development (R&D) expenses
Program
No. 34 : Preferential Tax Policies for the Research
and Development of FIEs
Program
No. 35 : Preferential tax policies for companies that
are recognised as high and new technology companies
Program
No. 36 : VAT Refunds for FIEs Purchasing
Domestically-Produced Equipment
Program
No. 37 : Tax concessions for Central and Western
Regions
Program
No. 38 : Income tax concessions for the enterprises
engaged in comprehensive resource utilisation
(special raw materials')
Program
No. 39 : Tax credit concerning the purchase of special
equipment
Program
No. 40 : Enterprise Income Tax Rate Reduction in the
Tianjin Port Free Trade Zone
Program No. 41: Income Tax exemption for investment
in domestic technological renovation
Program
No. 42 : Income Tax Reductions under Article 28 of the
Enterprise Income Tax Law
Program
No. 43: Preferential Tax Policies for Enterprises with Foreign Investment
(FIEs) Established in Special Economic Zones- & Coastal Economic Open Areas
and in the Economic and Technological Development Zones
Program
No. 44 : Preferential income tax policy for the
enterprises in the Northeast region
Program
No. 45 : Tariff and VAT Exemptions for Imported
Equipment
Program
No. 46 : Tax Offsets for Research and Development at
FIEs
Program
No. 47 : Tax Preference Available to Companies that
Operate at a Small Profit
Program
No. 48 : Tax Reductions for Export-Oriented FIEs
Program
No. 49 : Tax Reductions for Technology- or
Knowledge-Intensive FIEs
Program
No. 50 : Various local tax discounts (Shandong
Province, Chongqing City, Guangxi Region Zhuang, Tax privileges to develop
central and western regions)
Program
No. 51: VAT deduction on fixed assets in the Central region
Program
No. 52 : Shanghai Municipal Tax Refund for High-tech
Achievement Commercialization Projects
Program
No. 53 : Local income tax and reduction program for
the productive FIEs
Program
No. 54 : Preferential Tax Policies for FIEs
Established in the Pudong Area of Shanghai
Program
No. 55 : Local Income Tax Exemption and/or Reduction
in SEZs in Guangdong and Hainan Island
Program:
No. 56 : Industrial Parks promoting growth of Steel
Industry
Program
No. 57 : Other tax privileges of Ma’anshan
IV. Identified Programs in the Form of
Provision of Goods and Services
Program No. 58 : Provision
of Electricity for Less than Adequate & Fair Market Value Remuneration
Program
No. 59 : Provision of Water for less than Adequate
Remuneration
Program
No. 60 : Land Use Rights for SOEs
Program
No. 61: Government Provision for Steel Scrap for Less than Adequate
Remuneration
Program
No. 62: Provision for Coking Coal for Less than Adequate Remuneration
Program
No. 63 : Hot rolled Steel (HRS) Provided by Government
at Less than Fair Market Value
Program
No. 64 : Provision of Cold-Rolled for Less Than
Adequate Remuneration
Program
No. 65 : Raw Materials Provided by the Government at
Less than Fair Market Value
Program
No. 66 : Reduction in Land Use Fees, Land Rental Rates
and Land Purchase Prices
Program
No. 67 : Exemptions from Administrative Charges for
Companies in Industrial Zones and the Provision of Land-Use Rights for LTAR –
Land Use Rights in Certain Industrial and SEZs
Program
No. 68 : Export Restrictions on Coke
Program
No. 69 : Shanghai Municipal Subsidy to Coal-Fired
Power Plants for Emissions Reduction
Program No. 70 : Purchase
of Goods by the Government for higher than adequate Remuneration
IV.
Identified Programs in the Form of Preferential Loans & Lending
Program
No. 71: Allowance to Pay Loan Interest
Program
No. 72: Policy Loans
Program
No. 73: Preferential Loans for SOEs (State Owned Enterprise)
Program
No. 74 : Credit Loan Guarantee by GOC
Program
No. 75 : Preferential export financing from the
Export-Import Bank of China.
V. Identified Programs in the Form of Equity
Program No. 76 : Debt for
equity swaps
Program No. 77 : Debt
Forgiveness
Program
No. 78 : Deed Tax
Program
No. 79 : Dividend exemption between qualified resident
enterprises
Program
No. 80 : Unpaid dividends
Program
No. 81 : Equity infusions
VIETNAM
I. Schemes
Identified as Tax Incentives and Exemptions
Program
No 1: Income Tax Preferences under Chapter V of Decree 24 (Implementation of
the Law on Enterprise Income Tax)
Program
No 2: Import duty exemption or reimbursement for raw material
Program
No. 3: Exemption on corporate income tax for enterprises
II.
Schemes Identified as export financing and Export Credit
Program
No 5 : Preferential lending to exporters
Program
No 6 : Export Promotion Program
Program
No 7: Export credits form the Vietnam Development Bank
Program
No. 8: Export Support Credit
III.
Schemes Identified as Investment Incentives
Program
No. 9: Preferential Lending for investors:
Program
No. 10: Interest rate of the investment credit loans
Program
No. 11: On investment support on foreign investors who invested on establishing
small and medium scale enterprises.
IV.
Schemes Identified as benefits from banks
Program
No. 13: Financial Guarantees by Vietin Bank
V. Schemes
Identified for being located in specific Zones
Program
No 14 : Land Preferences for Enterprises in Encouraged
Industries or Industrial Zones under Decree 142
VI.
Schemes Identified for incentives on use of utilities
Program
No. 15: Government provision of land for less than adequate remuneration and
exemptions or reductions from land and water rents.
5.
It has been alleged that the above schemes are subsidies since they involve a
financial contribution from the Government of China and Vietnam, or other
regional or local governments, including public bodies and confer benefit to
the recipient(s). They are also alleged to be contingent upon the use of
domestic over imported goods and/or contingent upon export performance and/or
limited to certain enterprises or groups of enterprises and/or products and/or
regions, and therefore, specific and countervailable.
6.
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 the investigation.
D.
Allegation of Injury and Causal Link
7.
The applicants have furnished information on various parameters relating to
‘injury’ to the domestic industry as prescribed under Rules. The evidence
provided by the applicant prima facie shows that the ‘injury’ to the domestic
industry has been caused by subsidized imports from People’s Republic of China
and Vietnam.
E.
Initiation of the Investigation
8.
The Authority finds that there is prima facie evidence of existence of countervailable subsidies on production and export of the
subject goods in People’s Republic of China and Vietnam and such subsidized
imports are causing material injury to the domestic industry through their
volume and price effects.
9. 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 the 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
10.
The application has been filed by Stainless Steel Pipe and Tubes Manufacturer
Association, New Delhi and Stainless Steel Pipes & Tubes Manufacturers
Association, Ahmedabad, South India Stainless Steel Pipe and Tubes Manufacturer
Association and Haryana Stainless Steel Pipe and Tube manufacturer Association.
As per the evidence available on record, the production of applicants accounts
for a major proportion of the total domestic production. The applicants thus
satisfy the requirements of Rule 2(b) and Rule 6(3) of the Rules and
accordingly constitute the “domestic industry” within the meaning of Rule 2(b)
of Rules supra.
G.
Product under consideration
11.
11. The product under consideration is “Welded Stainless Steel Pipes and
tubes”, classifiable under various tariff sub-headings No. 73064000, 73066110,
73061100, 73062100.
H.
Like Articles
12.
The applicants have claimed that the goods produced by the domestic industry
are like articles to the subject good originating in or exported from subject
countries. It has been stated that there is no significant difference in the
subject goods produced by the applicants and those exported from subject
countries. The applicants claim that the two are technically and commercially
substitutable. For the purpose of present investigation, the subject good
produced by the domestic industry are being treated as ‘like articles’ of the
subject good imported from subject countries.
I.
Countries involved
13.
The country involved in the present investigation is People’s Republic of China
and Vietnam (also referred to as” Subject Countries”).
J.
Period of investigation
14.
The Period of Investigation (POI) in the present investigation is April
2017-March 2018 (12 months). The injury investigation period shall cover the
periods 2014-15, 2015-16, 2016-17 and the period of
investigation.
K.
Procedure & Submission of information
15.
The exporters in the subject countries, Government of the subject countries,
importers and users in India known to be concerned with the subject goods and
the domestic industry are being informed separately to enable them to file 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
16.
As per Rule 7(5) of the Rules supra, the Designated Authority is also providing
opportunity to the industrial users of the product under consideration, and to
representative consumer organizations who can furnish information which is
relevant to the investigation regarding subsidy, injury and causal link. Any
other interested party may also make its submissions relevant to the
investigation within the time limit set out below.
(i) Time limit
17.
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 China, known exporters and importers, who are being addressed separately,
are however required to submit the information within 40 (forty) days from the
date of the letter addressed to them separately. 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.
(ii)
Submission of Information on Non-Confidential basis
18.
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.
19.
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 non-confidential version must
be submitted.
20.
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.
21.
The non-confidential version is required to be a replica of the confidential
version with the confidential information preferably indexed or blanked-out/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 of summary; a
statement of reasons why summarization is not possible, must be provided to the
satisfaction of the Authority.
22.
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.
23.
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.
(iii)
Non cooperation
24.
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.
(iv) Inspection
of Public File
25.
In terms of Rule 7(7), any interested party may inspect the public file
containing non-confidential version of the evidence submitted by other
interested parties.
(v)
Sampling
26.
In view of the potentially large number of exporting producers in the People’s
Republic of China involved in this proceeding and in order to complete the
investigation within the stipulated time limits, the Authority may limit the
exporter(s)/ producer(s) to be investigated to a reasonable number by selecting
a sample. The sampling shall be carried out, if required, in terms of Rule
17(3) of the Rules.