Union Government slaps safeguard duty on certain steel imports
Revenue Department levied safeguard duty of 10% ad valor em minus the anti-dumping duty payable for imports at a price below $504 per tonne on CIF basis.
To protect domestic manufacturers from cheap imports, the Union Government on 24 November 2016 slapped safeguard duty on import of certain steel products. Steel products on which the safeguard duty was slapped include hot-rolled flat sheets and plates (excluding hot-rolled flat products in coil form) of alloy or non-alloy steel.
As per Revenue Department notification, the effective duty rate will be calculated after deducting the value of the goods. The anti-dumping duty will become payable when the import price is below USD 504 per tonnes on CIF (cost insurance freight) basis.
The notification also said that in the first year, the duty arrived would be 10 percent and will gradually reduce to 8 percent in 2018 and 6 percent by 2019. It says, the 10 percent ad-valorem minus anti-dumping duty payable will be imposed on imports up to 22 November 2017. The same will be lowered to 8 percent between 23 November 2017 and 22 November 2018. Later, it will be reduced to 6 percent between 23 November 2018 and 22 May 2019.
Ad-Valorem tax is a tax whose amount is based on the value of a transaction or of property. This tax is imposed at the time of the transaction in form of sales tax or value-added tax (VAT).
Safeguard Duty is a duty that is imposed on any product that is imported into the country in increased quantities if it injuries the domestic industry. It is a temporary measure and is imposed after conducting an enquiry.
The safeguard duty on import of cheap-steel was slapped after steel makers approached the Directorate-general of anti-dumping and allied duties. They requested the directorate-general (DG) to come up with safeguard measures against imports of cheap steel. The steel makers who approached the DG included Steel Authority of India (SAIL), Essar Steel and JSW Steel
Earlier in November 2016, the government also imposed a similar anti-dumping duty for six months on imports of steel wire rods from China. Previously, it had imposed such anti-dumping duty on few cold-rolled flat steel products from four nations including South Korea and China.