Principles governing the determination of Normal Value,
Export Price and Margin of Dumping
The designated authority while determining the normal value, export price and margin of dumping shall take into account inter alia, the following principles-
- The elements of costs referred to in the context of determination of normal value shall normally be determined on the basis of records kept by the exporter or producer under investigation, provided such records are in accordance with the generally accepted accounting principles of the exporting country, and such records reasonable reflect the cost associated with production and sales of the article under consideration.
- Sales of the like product in the domestic market of the exporting country or sales to a third country at prices below per unit (fixed and variable) costs of production plus administrative, spelling and general costs may be treated as not being in the ordinary course of trade by reason of price. The designated authority may disregard theses sales, in determining normal value, provided it has determined that-
- such sales are made with in a reasonable period of time (not less than six months) in substantial quantities, i.e. when the weighted average selling price of the article is below the weighted average per unit costs or when the volume of the sales below per unit costs represents not less than twenty per cent of the volume in transactions under consideration, and
- such sales are at prices, which do not provide for the recovery of all costs within a reasonable period of time. The said prices will be considered to provide for recovery of costs within a reasonable period of time if they are above weighted average per unit costs for the period of investigation, even though they might have been below per unit costs at the time of sale.
- The said authority in the course of investigation shall consider all available evidence on the proper allocation of costs, including that which is made available by the exporter or producer provided that such allocation has been historically utilized by the exporter of producer, in relation to establishing appropriate amortization and depreciation periods and allowances for capital expenditure and other development costs.
- unless already reflected in allocation of costs referred to in clause (1) and sub-clause (i) above, the designated authority, will also make appropriate adjustments fro those non-recurring items of cost which benefit further and/or current production, or for circumstances in which costs during the period of investigation are affected by start up operation.
- The amounts for administrative, selling and general costs and for profits as referred to in sub-section (1) of section 9A of the Act, shall be based on actual data pertaining to production and sales in the ordinary course of trade, of the like article by the exporter or producer under investigation. When such amounts cannot be determined on this basis, the amounts may be determined on the basis of :
- the actual amounts incurred and realized by the exporter or producer in question, in respect of producer in question, in respect of producer in question, in respect of production and sales in the domestic market of the country of origin of the same general category of article.
- the weighted average of the actual amounts incurred and realized by other exporters or producers, subject to investigation in respect of production and sales of the like article in the domestic market of the country of the country of origin; or
- any other reasonable method, provided that the amount for profit so established shall not exceed the profit normally realized by the exporters or producers on sales of products of the same general category in the domestic market of the country of origin.
- The designated authority, while arriving at a constructed export price, shall give due allowance for costs including duties and taxes, incurred between importation and resale and for profits.
- While arriving at margin of dumping, the designated authority shall make a fair comparison between the export price and the normal value. The comparison shall be made at the same level of trade, normally at the ex-factory level and in respect of scales made at as nearly as possible the same time. Due allowance shall be made in each case, on its merits, for differences which affect price comparability, including difference in conditions and terms of sale, taxation, levels of trade, quantities, physical characteristics, and any other differences which are demonstrated to affect price comparability
- In the cases where export price is a constructed price, the comparison shall be made only after establishing the normal value at equivalent level of trade.
- When the comparison under this para requires conversion of currencies, such conversion should be made by using the rate of exchange on the date of sale, provided that when a sale or foreign currency on forward markets is directly linked to the export sale involved the rate of exchange in the forward sale shall be used. Fluctuations in exchange rates shall be ignored and in an investigation the exporters shall be given at least sixty days to have adjusted their export prices to reflect sustained movements in exchanges rates during the period of investigation.
- Subject to the provisions governing comparison in this paragraph, the existence of margin of dumping during the investigation phase shall normally be established on the basis of a comparison of a weighted average normal value and export prices on a transaction-to-transaction basis. A normal value established on a weighted average basis may be compared to prices of individual export transactions if it is found that a pattern of export prices which differ significantly among different purchasers, regions or time periods, and if an explanation is provided as to why such differences cannot be taken into account appropriately by the use of a weighted average-to-weighted average or transaction-to-transaction comparison.