Notification No. 04/2025-Customs (CVD), Dated 26-06-2025
The Ministry of Finance, through Notification No. 04/2025-Customs (CVD), has imposed countervailing duties on the import of effect pearlescent pigments or mica pearlescent pigments, excluding those specifically meant for automotive applications. This move follows a detailed investigation and recommendation from the Designated Authority under the Directorate General of Trade Remedies (DGTR).
1. Scope and Classification of Subject Goods
The countervailing duty applies to the following categories of effect pearlescent or mica pearlescent pigments, as per the Customs Tariff Act, 1975:
- Tariff Item 3206 11 10
- Tariff Item 3206 11 90
- Tariff Item 3206 19 00
- Tariff Item 3206 49 90
These goods are primarily used in:
- Industrial applications
- Cosmetic formulations
- Non-automotive decorative coatings
Products meant exclusively for automotive applications are expressly excluded from the scope of this notification.
2. Findings of the Designated Authority
After reviewing the case, the Designated Authority concluded:
- The subject goods are being exported to India at subsidised rates
- Such subsidisation is resulting in material injury to the Indian domestic industry
Consequently, the Authority recommended the imposition of definitive countervailing duties to neutralise the unfair trade advantage and support fair competition.
3. Legal Basis for the Duty
The Central Government exercised its authority under Section 9 of the Customs Tariff Act, 1975, which deals with the levy of countervailing duty (CVD) on subsidised imports.
Accordingly, countervailing duties have been imposed based on the producer/exporter-specific subsidy margins, as determined during the investigation.
4. Duty Rates Based on Producer/Exporter
The countervailing duty rates vary by producer/exporter and are calculated as a percentage of the CIF (Cost, Insurance, and Freight) value. Key examples include:
- M/s Rika Technology Co. Ltd. – 14.49%
- M/s Henan Lingbao New Materials Technology Co. Ltd. – 16.74%
- Additional rates are listed in the duty table attached to the notification
These rates apply to goods imported directly or indirectly from China PR by the specified entities.
5. Duration and Currency of Duty
The countervailing duty will be:
- Applicable for a period of five years
- Subject to earlier revocation, amendment, or supersession, if notified
- Payable in Indian currency, with conversion based on the exchange rate notified under Section 14 of the Customs Act, 1962
6. Objective of the Imposition
The countervailing duty aims to:
- Offset the impact of subsidies granted by the exporting country
- Protect domestic manufacturers from unfair pricing pressure
- Restore a level playing field for Indian producers of pearlescent pigments
