Voicing concern over the misuse of the duty free import authorisation scheme by traders, the Indian Chemical Council has called for its review and appropriate and necessary modifications.

According to ICC, the duty free import authorisation scheme says that a manufacturer can import an input after export of the resultant product and further, the license can be transferred even to a trader.

"Thus duty free import authorisation scheme permits import of products attracting anti-dumping duties by a trader. Such imports made by the trader can then be sold in the market. The scheme thus allows the traders to continue to resort to dumping and cause injury to the Indian producers," the ICC said in letters to the Department of Chemicals and Petrochemicals (DCPC), the Department of Commerce and the DGFT among others.

"Given the underlined objective of granting exemption from payment of anti-dumping duties in respect of imports meant for export and given that these exemptions were intended solely on the basis of end use conditions, it is imperative that the advance authorisation scheme is modified to provide that no exemption from anti-dumping duties shall be permissible if the license has been transferred to a trader. In other words, exemption from payment of anti-dumping duties should be restricted to ?end use? basis."

The ICC requested for review of the current policy for appropriate and necessary modifications in the larger interests of the industry.

Anti-dumping duties being imposed by the government are required to be paid on all imports into the country with the exemption of imports made by EOU, SEZ, imports under advance authorisation scheme and duty free import authorisation scheme, the ICC said.

Anti-dumping is a measure to rectify the situation arising out of the dumping of goods and its trade distortive effect. Thus, the purpose of anti-dumping duty is to rectify the trade distortive effect of dumping and re-establish fair trade. The use of anti-dumping measure as an instrument of fair competition is permitted by the WTO.