Page 394 - Manual Of SOP

Disclosure Statement & Final Finding

16.39. A fixed duty may not be desirable where the Product under Consideration
has a large number of variants in terms of their prices as the lower price variant
will have a higher incidence of effective and vice versa for higher price variant.
For example, if the anti-dumping duty is USD 200 per MT on different variants
ranging from USD 1000 to USD 2000 per MT. In such a case, the effective impact
on Variant A will be 20% while on Variant B, it will be only 10%. This impact may
be unintended from the Authority’s point of view.

16.40. The Authority has to take a decision based on merit after taking into
consideration the above mentioned factors for each case and also taking into
account the effect of duty on the user industry.

16.41. If the fixed duty is recommended, then it should be preferably in US$ terms
as it will protect the domestic industry from rupee depreciation also.

Ad Valorem Duties:
16.42. Ad Valorem duties are more appropriate where there are many grades or
types within the PUC or there is a considerable price variation within the scope of
the Product under Consideration or PCNs. Under this method, the lower as well as
higher price goods bear the same level of effective duties over the entire period of
imposition of ADD.

16.43. Ad valorem duty is not desirable if the subject goods are susceptible to
undervaluation or manipulation of prices or there is likelihood of circumvention
of duties. In fact, ad valorem duty can induce errant importers to indulge in under
invoicing of imports.

Reference Price based Duty:
16.44. This duty is more appropriate when the Authority is convinced that there
is a need to protect the interests of the downstream industry while taking care of
the concerned Domestic Industry. Sometimes, the Reference Price may need to be
recommended when the user industry imports specific grades of PUC, which is not
available in the country or DI is manufacturing only certain price range of goods but
the same cannot be distinguished as a separate product. Reference Price in such
cases ensures fair selling prices for the domestic industry for the PUC.

16.45. This form of duty may not lead to price increases in imports if they are being
imported at fair prices.

371