The WTO Agreement provides that importers can request refund of anti-dumping duties paid in excess of actual dumping margin with respect to the imports made. Such request does not challenge the validity of the dumping margin or quantum of duty determined, but merely implies that the actual dumping margin for the transactions in question was lower. Such provision has been incorporated into the law of various WTO members. Both, European Union and India, also have provisions in their respective law allowing claim for such refunds and have prescribed the application proforma for this purpose as well. While refund of duties has been requested in various cases in the European Union, no such request has been made in India till date.
Refund of anti-dumping duty under WTO
Article 9.3.2 of the WTO Anti-Dumping Agreement, 1994 provides that where an anti-dumping duty has been levied, an importer may request a refund of the duty that has been paid in excess of the actual dumping margin. The provision was incorporated to ensure prompt reimbursement of overpaid duties and to avoid the delays caused in the conclusion of review investigations. Article 9.3.2 also provides that the refund procedure must be applied in cases where the amount of duty is assessed on a prospective basis. Such practice has been adopted by various WTO members, including India and the European Union (EU), which makes the refund application exclusively retrospective in nature. The procedure for refund does not challenge duties imposed but rather, it requires examination of a change in the situation which has directly impact the dumping margin determined for the product.
Refund of anti-dumping duty in the European Union
Article 11(8) of the EU Regulation on Protection against Dumped Imports from Countries not Members of the European Union, 2016 (Regulation) provides that the refund investigation may be requested by an importer in case where the dumping margin, which formed the basis of duties paid, has been eliminated or reduced to a level which is below the level of duty in force. The European Commission (EC), on request, must refund any duty collected in excess of the actual margin of dumping prevailing at the time of duty collection, as compared to margin determined in the original investigation. Thus, the refund mechanism ensures that the anti-dumping duty collected is equivalent to the margin of dumping determined for the sales that are subject to the duty assessment. In 2021, the EC issued a Notice in consonance with Article 11(8) of the Regulation, providing the guidelines for application for refund of anti-dumping duty.
As per the Notice, an application must be submitted in writing by the importer or their representative within six months of the date anti-dumping duties were determined. The application can only consider duties for transactions made six months prior to such application. The applicant must provide evidence, including all invoices, documents for customs clearance specifying the duties to be levied, and declaration by the exporting producer stating they would submit all relevant information as required by the EC.
The EC must conclude the refund investigation within 12-18 months from the date on which application was received. It must determine, for a representative period, dumping margin in respect of all the exports of the product concerned made by the exporting producer to all its importers in the EU and not only to the importer claiming a refund.
If the merits of the application are satisfied, the Commission may find that:
- There is no refund of the duties paid when the dumping margin is found equal to or higher than the anti-dumping duty collected; or
- Shall refund part of the duties paid when the dumping margin has decreased below the anti-dumping duty collected; or
- Shall refund all of the duties paid when the dumping margin has been eliminated.
Where a refund is granted, Member States have to make the relevant payment within 90 days from the date when the EC Decision is notified.
Refund of anti-dumping duty in India
Section 9AA of the Customs Tariff Act, 1975 and Rule 21A of the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Amendment Rules, 2012, provides for the determination of duty paid by an importer and refund of said duty if the amount paid is in excess of actual margin of dumping. Pursuant to the provision, the Directorate General or Trade Remedies (DGTR) issued a format for "Application for Determination of Amount Paid in Excess of Actual Margin of Dumping" which can be filed by an importer to claim a refund of excess duties paid.
In order to seek refund of duty, an importer would be required to furnish, inter alia, details of imports made after payment of anti-dumping duty, expenses incurred between importation and resale, resale of the product imported, stock statement, and certificate from the producer/exporter. The importer also has a period of one month to rectify the documents in case deficiencies have been pointed out by the Authority.
Pursuant to such an application, the DGTR must determine if the duty paid is in excess of the actual margin of dumping by taking into account any change in normal value,
costs incurred between importation and resale and any movement in the sale price which is duly reflected in the subsequent selling price. However, while the procedure for refund exists, no such application is known to have been filed in India till date.
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