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.

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.