Countervailing duty

[Former Member]

Dear Experts

Please explain the concept of Countervailing duty - CVD.

Regards

SDC

[Former Member]

Hi,

pl check this documentation.

IMPORT DUTIES

Customs duties

Customs duties are levied at specific percentage ad valorem, specific amount per unit of quantity or both, depending on the classification of the imported goods in the Customs Tariff Act.

The classification of goods and the applicable rates for the levy of import duties are furnished in the Customs Tariff Act. Duty rates may change according to the country of origin and the type of product. For example, complete exemption or rate concessions are allowed on the import of specified items from some neighboring and developing countries such as Bangladesh, Bhutan, Egypt, Myanamar, Nepal, and Sri Lanka.

Schedule I to the Imports (Control) Order 1955, commonly known as ITC Schedule, contains several thousand classifications for imports.

Three types of duty are generally applicable to imports into India : basic, special and additional (or Countervailing) duties. The special customs duty is in force until March 31, 1999 at a flat rate of 2 percent on the value of all imported goods except those subject to a zero rate of duty. The counter vailing duty is equal to the excise duty on similar articles produced or manufactured in India, and it is eligible for an offset against excise duty liability if the imported goods are used in the manufacture of other goods. A fourth type of duty, referred to as protective duty, may be imposed to counter the effect of a bountry or subsidy given by an exporting country.

Basic duties generally range from 0 to 50 percent. Lower duty rates are generally applicable to raw materials and intermediate goods as opposed to finished products. Duty drawback is available for imported raw materials used in products exported. General machinery and project imports are subject to duty at the effective rate of 39.7 percent (including 12.7 percent on account of countervaling duty, which may be eligible for offset), although certain specific projects benefit from lower rates. Effective duty is sometimes lowered due to exemptions or concessions provided through notifications. Import duties have been considerably lowered, and further reductions may take place over the next few years.

Duty is waived or a concessinal duty rate is permitted for export into India of capital goods under the Export promotion Capital Goods (EPCG) Scheme.

Antidumping duty provisions have been invoked in some cases. Indications are that they may be applied more actively where availability of imports in India at lower price that that prevailing in the exporting country is likely to cause significant harm to the domestic industry.

regards

sadhu kishore