Commerce Drops VAT From Chinese Company's Export Price in AD Case, Parties Sign Off
Following a second remand order from the Court of International Trade, the Commerce Department dropped a downward adjustment for irrecoverable value-added tax from Chinese tire exporter Qingdao Sentury Co.'s export price in an antidumping case in its second remand determination. Sentury's antidumping rate dropped from 4.42% to 2.26%, leaving both Sentury and the government defense to sign off on Commerce's remand in May 7 filings from the exporter and DOJ, setting up a final decision from Judge Jennifer Choe-Groves. Reversing itself under respectful protest, Commerce only dropped the VAT from the export price after Choe-Groves found that the VAT is not an export tax but rather a domestic tax presumed to be included in the price of the subject good.
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The case stems from the first administrative review of an antidumping duty order on certain passenger vehicles and light truck tires from China covering entries in 2015-16. In the decision remanding the case to Commerce for the second time, the court found that Commerce’s regulations allow for an upward adjustment to the export price, and consequently a decrease in the AD duty rate, for VAT refunded on exportation. But the agency can’t adjust the export price downward for VAT, even when it’s not refunded, CIT said.