./.RESTRICTEDWORLD TRADE
ORGANIZATIONG/SCM/W/452
11 June 2001
(01-2864)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
FOLLOW-UP QUESTIONS AND COMMENTS CONCERNING
PROPOSALS ON IMPLEMENTATION-RELATED ISSUES
REFERRED TO THE COMMITTEE IN THE 15 DECEMBER 2000
DECISION OF THE GENERAL COUNCIL
Comments of Canada
The following communication, dated 8 June 2001, has been received from the Permanent
Mission of Canada.
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G/SCM/W/444 – Replies by India
Inputs Consumed in the Production Process
1. In its response to the question by Canada on how the appropriate amortization rate would be
determined, India stated that it would be done on the basis of generally accepted accounting practices.
However, such practices can vary from country to country, and differences in practices could
substantially affect the amount of drawback being claimed.  How could Members ensure that thisprovision would be used consistently, without th e level of depreciation being claimed varying from
country to country?
Generalized Rates of Remission
1. The proposal suggests that there would be a determination of the statistical amount of various
inputs required for the manufacture of one unit of the final product.  It is not clear whether this
determination would be made only upon application for duty drawback by an exporter so that the
determination would be made specifically in respect of the exported product or whether there would
be a generalized rate already established for that type or class of product.  If the latter is the case, whatwould be the product level at which this determination would be made and how would this system
account for variations in the product in terms of design, grades, specifications and so forth?
2. It is noted that the statistical norm would be established on the basis of a large number of
manufacturers engaged in the production of the same final product.  How would this calculation bemade where there may be significant variations among the various producers in respect of the
properties of the final product making it difficult to aggregate the data?  How would the calculation be
adjusted if there is a wide discrepancy between the efficiency of the various producers in order to
ensure that the statistical norm is representative?G/SCM/W/452
Page 2
3. Would the statistical norm be established by reference to all manufacturers of the subject
goods in the country of export or would it be restricted to only those manufacturers who produce for
export sales (as these may be the most efficient producers)?
4. How frequently would the statistical norms and input prices be updated in order to reflect
changes in production processes, the entry of new producers into the market or input price or currency
fluctuations?
5. In respect of the indicative prices, it is noted that the international price of the input could be
the lowest of the actual transaction prices available with the customs authorities.  How would this
price take into account price variations that are due to quantity purchases, currency fluctuations,
quality differences, country of origin, inter-company transactions, seasonal or market volatility, long-term negotiated prices versus "spot market" prices?
6. Would there be a system for verifying on a periodic basis that specific producers have not
been overly compensated in terms of duty drawback in relation to the amount of duty actually paid or
payable and, if so, appropriate adjustments could be the amounts that had been drawn back in respectof those producers?
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