Finance, commerce ministries in a turf war
Atussle is brewing between the finance and commerce ministries over the formation of a trade remedies body to guard Indian industry from rising protectionism.
The department of revenue has objected to a draft Cabinet note circulated by the department of commerce to merge the safeguards and anti-dumping directorates into a directorate of trade remedies.
The Central Board of Excise and Customs (CBEC) has contested the structure of the new body, proposed to be under the department of commerce and headed by an additional secretary.
At present, the safeguards directorate falls under the CBEC and the anti-dumping directorate comes under the department of commerce.
The proposed trade remedies directorate, on the lines of the US International Trade Commission (USITC), will guide industry and stakeholders on the best available remedy in case of injury from imports.
“The inputs for the draft Cabinet note are being compiled. All remedies should be available to industry under one roof. This body under the commerce department will guide industry on whether to opt for safeguards, anti-dumping duty, countervailing duty or minimum import price. Industry will not have to run around looking for remedies,” said a commerce department official.
“With Finance Minister Arun Jaitley’s approval we have pitched for an independent commission headed by a tax expert instead of it falling under the commerce department. In the worst case scenario, the anti-dumping directorate should also come under the revenue department,” said a CBEC official.
Commerce department officials argue that the trade remedies directorate will provide clarity to industry. “Today, while the anti-dumping directorate finds no injury, the safeguards directorate finds injury on account of imports. There is a clash, which needs to be addressed,” the commerce department official said.
Anti-dumping duties are imposed if a country exports goods to another country at a price much lower than what it charges in its home market. Countervailing duties are levied on imported goods to offset export subsidies offered to producers in the exporting country. Safeguards are imposed to limit imports of goods temporarily if domestic industry risks being harmed by a surge in imports.
The CBEC is also concerned over the 90 service posts from the safeguards directorate that will move to commerce, taking away work from the department. This will be on the top of dilution of powers of the CBEC under the proposed goods and services tax.
The proposal to merge the two bodies emerged amid slowing global trade and rising protectionism. The move is aimed at building expertise and improving coordination.
The CBEC has also protested against the commerce department’s proposal for a logistics division to simplify movement of goods by exporters and importers.
“The commerce department is trying to duplicate work the Customs department is doing. We started a singlewindow clearance facility last year and it has reduced the time for exporters. We have upgraded our systems. You cannot do Customs work at 100 places,” said a Customs official.
The commerce department has proposed integrating business processes related to shipping, rail, roads and container freight stations.