The government has extended Countervailing Duty (CVD) on new or unused pneumatic radial tyres imported from China for five years. Earlier, this was ending on July 23. This move is expected to benefit domestic companies such as MRF, Apollo Tyres, and J K Tyres, among others.
CVDs are additional charges levied on imported goods to counter any unfair advantage a foreign manufacturer might have due to government subsidies. This aims to ensure a level playing field for domestic manufacturers.
According to a Finance Ministry notification, ‘New/Unused pneumatic radial tyres with or without tubes and/or flap of rubber (including tubeless tyres), having nominal rim dia code above 16 inches used in buses and lorries/truck’ manufactured in China and exported from any country including China will attract CVD at the rate of 17.57 per cent. “The countervailing duty imposed under this notification shall be levied for a period of five years (unless revoked, superseded or amended earlier) from the date of publication of this notification in the Official Gazette and shall be payable in Indian currency,” the notification said.
This decision has been based on a detailed investigation. There, it was established that the producers in the subject country (China) continue to avail themselves of subsidies that were held to be countervailable in the original investigation. It was said that principles of judicial economy demand that a determination of a program’s countervailability is relevant and appropriate only if information with regard to the quantification of benefit is available and on record.
“The authority cannot on its own collect evidence for quantification of evidence. In any case, the authority has considered that the Chinese producers have not fully cooperated in the present investigation and has appropriately considered the same while recommending the quantum of countervailing duty,” the notification said. The domestic industry has not suffered continued injury during the present period of investigation in as much as it has not suffered deterioration in its performance about various economic parameters
“There is a likelihood of injury to the domestic industry in the event of cessation of present countervailing duty, and has recommended continuation of definitive countervailing duty on imports of the subject goods originating in, or exported, from the subject country,” the notification added.