The Director General of Foreign Trade amended the DEPB rates of plastic products by a public notice issued on 23 November 2004.
The DEPB rates of 94 products have been reduced by two to four percent. The main reduction is in 48 plastic products where the rates are down to 9 percent from the previous slabs of 13, 12 and 11 percent. The items are mainly products of ABS, HDPE, LDPE, polystyrene.
Our calculations show a fall of 4.1 percent in the weighted average. The current DEPB rate compared to previous level.
(Previous weighted average 13.7 percent, current 9.6 percent). Exporters are upset over the cuts since the plastic prices have gone up substantially and the value addition rate has come down.
As a result, they say, the DEPB rates should be stepped up. The recent cut of five percent in basic customs duty on plastic raw materials is limited only to a small part of the plastics chapter, the other duties are still remaining at 20 percent.
Thankfully, the cap value which defines the ceiling fob value of export beyond which the government will not give DEPB is maintained in the new dispensation. The DGFT is sensitive to the market situation and has refrained from using the knife on cap value.
Actually, there is a case for raising cap value considering the over 50 percent rise in plastic prices.
On engineering items, the rates have been raised on a few alloy steel items besides graphite electrodes and compressors for air conditioners. Apparently, the calculations were revised following discovery of new data on duty rates and value addition.
In the meanwhile, there is no news on the drawback schedule. Our information is that the Finance Minister wants to revamp the entire range of export promotion instruments and is not too happy with the formatting of the proposed drawback schedule. Exporters are, however, rejoicing since they will continue to get the relatively high rate of drawback for some more time.
Tariff Value: The tariff value has brass scrap (all grades) has been increased to US$ 1576 per MT from US$ 1495 per MT by a notification issued on 10 November, 2004 by the Department of Revenue. All imports will be assessed for duty purposes at this value only and the actual cif value on the invoice.
Drugs registration: The Directorate General of Foreign Trade has clarified by a policy circular issued on 23 November that the Government Opium and Alkaloid Works (GOAW) Neemuch & Ghazipur and the Chief Controller of Factories (CCF) are not required to register under the Drugs and Cosmetics Act, 1940 for import of Narcotics Drugs and Psychotropic substances.
Indo-Thai FTA: The Department of Revenue has amended the notification of interim rules of origin for early harvest scheme (EHS) under Indo- Thailand Free Trade Agreement by a notification issued on 24 November 2004. 82 items in Annexure B of the Interim Rules of Origin under the Framework Agreement for establishing the Free Trade Area between the Thailand and India has been deleted.
The list was superfluous and the same effect was achieved by the general rules of origin and Annexure A items listing goods for special treatment at six digit level.
Caprolactam: The Department of Revenue confirmed the findings of the Designated Authority in Ministry of Commerce in the Caprolactam anti-dumping case initiated in September last year.
With effect from 17 November, the anti-dumping duty will apply on the import consisting of the difference of the minimum landed price of $1394 per tonne and the cif value plus the basic duty of 20 percent. The less the duty or the cif value, the more the anti-dumping duty.
The two producers GSFC, Vadodara and FACT Cochin have managed to convince the Commerce Ministry based on constructed normal value.
They say that domestic price of caprolactam, the main raw material for production of Nylon 6, is not available in European Union, Japan, Thailand and Nigeria, the four countries affected by the anti-dumping duty.
The dumping margins of 10 to 40 percent were discovered in the imports. This was followed by the establishment of injury claims of "net sales price suppression" saying that had the 12 or so producers not imported, prices would have gone up for the two domestic producers.
Now that GSFC and FACT have had their way, prices will go up in the medium run. (Given the current high price of Benzene, the source material for caprolactam, the anti-dumping trigger may not be activated in the near future).
The entire downstream users starting from Nylon Tyre Cord to industrial textiles and tyre manufacturers will cry about inability to face import competition. As somebody said, "what is medicine for one industry is poison for several others".
Melamine, PTFE: By a notification, the Department of Revenue has imposed an anti-dumping duty on PTFE from Russia for US$ 12.66 per kg on 18 November. Melamine exported from China will attract a minimum landed price of US$ 1284.38 per MT.
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