RESTRICTED
WORLD TRADE G/ADP/Q1/IND/1
G/SCM/Q1/IND/1
ORGANIZATION 4July1996
(96-2558)
Original: English Committee onAnti-Dumping Practices
Committee onSubsidies andCountervailing Measures
NOTIFICATION OFLAWS AND REGULATIONS UNDER
ARTICLES 18.5AND 32.6OFTHE AGREEMENTS
Replies ofINDIA1
toquestions posed byVENEZUELA2
Thefollowing communication, dated 17June1996, hasbeenreceived from thePermanent
Mission oftheIndia.
________________
Q.1. ORDER OFPRECEDENCE OFLEGISLATION
Please indicate thepurpose ofeachofthetextsnotified totheCommittee andtheirorder of
precedence Customs Tariff (Identification, Assessment andCollection ofAnti-Dumping Duty
onDumped Articles andforDetermination ofInjury) Rules, andCustoms Tariff (Identification,
Assessment andCollection ofCountervailing DutyonSubsidized Articles andforDetermination
ofInjury) Rules.
TheCustoms Tariff Act,1975isthebasic Indian Lawonimport duties andcharges including
anti-dumpingdutiesandcountervailingduties.TheCustomsTariff(Amendment)Act,1995onpages2-8
ofdocument G/ADP/N/1/IND/2-G/SCM/N/1/IND/2 dated 15August 1995 (hereinafter called "the
document") reflects theamended lawrelating toAnti-Dumping andCountervailing duties. Section 9(7)
oftheCustoms Tariff Act,1975authorizes Central Government tomake rulesfortheassessment and
collection ofanycountervailing dutyimposed upon theimportation thereof. These rules havebeen
notified videNotification No.1/95-NT Customs dated 1January 1995andareavailable onpages 25-40
ofthedocument. Similarly section 9A(6) oftheCustoms Tariff Act,1975 authorizes theCentral
Government tomake rulesforascertaining themargin ofdumping, inquiry, identification ofarticles
liable foranyanti-dumping dutyandthemanner inwhich export prices, thenormal value andthemargin
ofdumping inrelation tosucharticles maybedetermined andforassessment andcollection ofsuch
anti-dumping duty. These ruleshavebeennotified videNotification No.2/95-NTCustoms available
onpages 9-24ofthedocument.
Q.2. DURATION AND EXTENSION OFPROVISIONAL ANTI-DUMPING MEASURES
According toArticle 7.4oftheAnti-Dumping Agreement, provisional measures maybeimposed
forfour(4)months andthisperiod maybeextended forsix(6)tonine(9)months onlywhen
theamount ofdutyislower thanthemargin ofdumping provisionally set.
1G/ADP/N/1/IND/2 +Corr.1-G/SCM/N/1/IND/2 +Corr.1.
2G/ADP/W/153-G/SCM/W/160.G/ADP/Q1/IND/1
G/SCM/Q1/IND/1
Page2
Howcanthesecond paragraph ofRule13oftheCustoms Tariff Rules onDumped Articles
bereconciled withArticle 7.4oftheAnti-Dumping Agreement, when theformer provides for
thelevyofprovisional duties forsix(6)months, which maybeextended foramaximum period
ofnine(9)months?
Rule18(1) provides thattheamount ofdutyshallnotexceed theamount which hasfound
adequate toremove theinjury todomestic industry inthecaseofspecified countries vizWTO Members.
Rule13provides theperiod ofsixtoninemonths respectively inaccordance withArticle 7.4ofthe
Agreement sofarasWTO Members areconcerned.
Q.3. PAYMENT OFPROVISIONAL DUTIES
According totheprovisions ofArticles 7.2and17.2oftheAnti-Dumping Agreement and
Agreement onSubsidies, respectively, provisional measures maytaketheformofaprovisional
dutyor,preferably, asecurity bycashdeposit orbond.
Intheabsence ofspecific legalprovisions tothateffect, howdoesIndia provide forthepayment
ofsuchduties?
Inaccordance withsection 9(2)andsection 9A(2) oftheCustoms Tariff Act,1975, theCentral
Government hasthepower toimpose countervailing dutyoranti-dumping duty, asthecasemaybe,
asprovisionally estimated. Rule13oftheanti-dumping rulesandRule15ofthecountervailing duty
rulesprovide thatsuchimposition ofaprovisional dutymaybeonthebasisofthepreliminary findings
recorded bythedesignated authority.
Q.4. DURATION AND EXTENSION OFFINAL MEASURES
According totheprovisions ofthefirstparagraph ofSection 9,subsection (6)andSection 9,
subsection (5)oftheCustoms Tariff Act,theGovernment ofIndia may, fromtimetotime,
(ouremphasis) extend theduration oftheimposed measure foraperiod offive(5)years.
Aretheextensions mentioned inbotharticles asbeing made periodically carried outonceor
mayseveral extensions, eachlasting five(5)years, bemade?
Theextension ofcountervailing dutyand/or anti-dumping dutyisprovided forinsection 9(6)
andsection 9A(5) respectively oftheCustoms Tariff Actonareview conducted bythedesignated
authorityundertheprovisionsofRule24ofthecountervailingdutyrulesandRule23oftheanti-dumping
rules respectively. Such areview maybeconducted bythedesignated authority from timetotime.
Thus, several extensions canbeeffected inaccordance withboththeArticles.
Q.5. COUNTRY OFORIGIN
Thelastparagraph ofSection 9A,subsection (1)oftheCustoms Tariff (Amendment) Act,1995
refers to"country oforigin" butdoesnotgiveadefinition ofthisterm.
Howis"country oforigin" tobeinterpreted?
Theterm"country oforigin" isnotdefined intheCustoms Tariff Act,1975 orrules made
thereunder. However, theWTO Agreement onrulesoforigin would helpininterpretation oftheterm.G/ADP/Q1/IND/1
G/SCM/Q1/IND/1
Page3
Q.6. UNDERTAKINGS
According tosubrule (5),Rule15ontheIdentification ofDumped Articles andsubrule (5),
Rule17ontheIdentification ofSubsidized Articles, theGovernment maynotlevyananti-
dumping orcountervailing duty,asthecasemaybe,while anundertaking remains valid. Does
thismean thattheGovernment ofIndia maylevysuchduties oncethetermoftheundertaking
inquestion hasexpired?
Yes.
Q.7. COURT OFAPPEAL
Please giveabriefdescription oftheprovisions ofSection 129C oftheCustoms Act,1962
pertaining totheCourt ofAppeal.
Section129CoftheCustomsAct,1962givesthepowersandfunctionstotheAppellateTribunal,
exercised anddischarged byBenches constituted bytheGovernment.3
Q.8. DOMESTIC INDUSTRY
Could India kindly explain howaproducer engaged inanyconnected orlikeactivity maybe
considered aproducer ofadomestic industry (definition (b)ofRule2oftheCustoms Tariff
RuleonDumped Articles, anddefinition (b),Rule2oftheCustoms Tariff RuleonSubsidized
Articles).
Aproducer engaged inanyconnected orlikeactivity maybeconsidered aproducer ofadomestic
industry when heisadomestic producer oflikeproducts whether engaged inmanufacture ofanyactivity
connected therewith.
Q.9. FORM OFAPPLICATION
Accordingtosubrule(2),Rule5oftheCustomsTariffRulesonDumpedArticlesandsubrule(2),
Rule6oftheCustoms Tariff Rules onSubsidized Articles, theauthority designated toinvestigate
theexistence, degree andeffect ofanyalleged dumping shall specify theforminwhich the
application forinvestigation istobesubmitted.
(a) Please indicate briefly theusual forms required forthesubmission ofsuchapplications.
(b) Intheabsence ofspecific provisions, howwilltheGovernment ofIndia ensure that
applications fortheinitiation ofaninvestigation willbecompatible withthefulfilment
ofobligations under subparagraphs (i),(ii),(iii)and(iv)ofArticle 5.2oftheAnti-
Dumping Agreement and(i),(ii),(iii)and(iv)ofArticle 11.2oftheAgreement on
Subsidies?
Theusual formrequired forsubmission ofanti-dumping petitions issupplied totheapplicant
ondemand andcalled forquestionnaire forlodging anti-dumping petitions. Thisform allows the
requirement ofArticle 5oftheanti-dumping Agreement. Indiahasnotconducted aCVD investigation
sofar.
3Circulated asdocument G/ADP/N/2/IND/Suppl.1-G/SCM/N/2/IND/Suppl.1.G/ADP/Q1/IND/1
G/SCM/Q1/IND/1
Page4
Q.10. EXISTENCE OFINJURY AND CAUSAL LINK INTHE APPLICATION FOR
INVESTIGATION
According toArticle 5.2oftheAnti-Dumping Agreement, anapplication mustbesupported
byevidence oftheexistence of:(i)dumping, (ii)injury and(iii)acausal linkbetween the
dumped imports andthealleged injury.
Please explain whydefinitions (b)and(c)ofsubrule (2),ofRule5oftheCustoms Tariff Rules
onDumped Articles refer to"...(b)injury, where applicable; and(c)where applicable, a
causal linkbetween suchdumped objects andalleged injury".
Similarly, Article 11.2oftheAgreement onSubsidies provides thatapplications mustinclude
evidence oftheexistence of:(i)asubsidy, (ii)injury and(iii)causal linkbetween thesubsidized
imports andthealleged injury.
Please explain whydefinitions (b)and(c)ofsubrule (2),Rule6oftheCustoms Tariff Rules
onSubsidized Articles referto:"...(b)injury where applicable, and(c)where applicable,
acausal linkbetween suchsubsidized imports andalleged injury".
Rule2(f)oftheAnti-dumping Rules andRule2(e)oftheCVD rulesdefine aspecified country.
AllWTO Members, asperthisdefinition, arespecified countries. Rule4(C)(ii) oftheanti-dumping
rulesauthorizes thedesignated authority tosubmit itsfindings oninjury consequent upon theimport
ofsucharticles. Thewords: "where applicable" areusedinsub-rules 2(b)and(c)ofRule5inthis
context. Thus, inthecaseof"specified countries" therulesrequire determination ofinjury andcausal
linkinconformity withArticle 5(2)oftheanti-dumping agreement. Similar provisions areincorporated
incountervailing dutyrules.
Rule4(c)(2) andRule6(2)(b)(c) areinconformity withArticle 11.2oftheSubsidies Agreement.
Q.11. DEGREE OFSUPPORT FOR ANAPPLICATION
What method isusedtodetermine thedegree ofsupport oropposition toanapplication?
Rule5(3)oftheanti-dumping rulesandRule6(3)oftheCVD rulesspecify themethod used
todetermine thedegree ofsupport oropposition totheapplication.
Q.12. NON-DISCLOSURE OFINFORMATION
Intheabsence ofspecific provisions, howwilltheGovernment ofIndia ensure thefulfilment
ofobligations under Article 5.5oftheAnti-Dumping Agreement?
Theapplication specified bythedesignated Authority contains theelements listed inArticle 5(2)
oftheAgreement. Further Rule5(3)oftheADRules provides thatananti-dumping investigation
cannot beinitiated bythedesignated authority unless thedesignated authority examines accuracy and
adequacy oftheevidence provided intheapplication andsatisfies itselfthatthereissufficient evidence
andconsequential injury justifying theinitiation ofinvestigation. Rule6(1)provides thatthedesignated
authority shallissue apublic notice onlyafterithasdecided toinitiate investigation. Itfollows that
thedesignated authority shall publicize theapplication, ithasreceived before suchdecision. This
takes careofArticle 5.5oftheAgreement.G/ADP/Q1/IND/1
G/SCM/Q1/IND/1
Page5
Q.13. PRINCIPLESFORTHEDETERMINATIONOFNORMALVALUE,EXPORTPRICEAND
MARGIN OFDUMPING
According toRule10oftheCustoms Tariff Rules onDumped Articles, thedesignated authority
willdetermine normal value, export priceandmargin ofdumping, taking intoaccount, among
others, theprinciples stated inAnnexure IoftheRules.
What aretheother principles usedbytheauthorities inIndia forthedetermination ofsuch
values?
Theprinciples laiddown inAnnexure IoftheAnti-dumping Rules substantially represent the
relevant provisions ofArticle 2oftheAnti-dumping Agreement. Theuseoftheword "interalia"
inRule10istoenable thedesignated authority toapply other extant lawsoftheland, ifandwhere
applicable.
Q.14. START-UP PERIOD
Intheabsence ofspecific provisions andintheevent thatthestart-up period isgreater than
theperiod ofinvestigation, howwilltheGovernment ofIndia ensure thatadjustments made
forstart-up operations willbeinconformity withtheprovisions ofArticle 2.2.1.1 oftheAnti-
Dumping Agreement (Note 6)?
Although provisions ofArticle 2.2.1.1 arereflected inparagraph 3(11) ofAnnexure Itothe
anti-dumping rules, there arenospecific provisions relating tofootnote 6.Thedesignated authority
hasnotfaced anyproblem inadministration ofanti-dumping investigations insofarasparagraph 3(2)
ofAnnexure Ioftheanti-dumping rules isconcerned.
Q.15. MARGIN OFDUMPING
Howcantheprovisions ofclause (iv)ofsubrule (6),Rule4,Annexure IoftheCustoms Tariff
Rules onDumped Articles bereconciled withtheprovisions ofArticle 2.4.2 oftheAnti-Dumping
Agreement which stipulates thatthemargin ofdumping should normally beestablished onthe
basis ofacomparison ofaweighted average normal value withaweighted average ofprices
ofallexport transactions, orbyacomparison ofnormal value andexport prices ona
transaction-to-transaction basis?
Thisisatypographical error which isbeing considered forrectification.
Q.16. PRINCIPLES FORTHEDETERMINATION OFTHEEXISTENCE OFINJURY, THREAT
OFINJURYORMATERIALRETARDATIONTOTHEESTABLISHMENTOFDOMESTIC
INDUSTRY
According toAnnexure IIoftheCustoms Tariff Rules onDumped Articles, theauthority
designated todetermine theexistence ofinjury, threat ofinjury ormaterial retardation tothe
establishment ofadomestic industry shalltakeintoconsideration among others theprinciples
stated intheabove-mentioned Annexure.
Whataretheotherprinciples usedbytheauthorities inthedetermination ofsuchcircumstances?
Theuseoftheword "interalia"inthechapeau ofAnnexure IIistoenable thedesignated
authority toapply other extant lawsoftheland, ifandwhere applicable.G/ADP/Q1/IND/1
G/SCM/Q1/IND/1
Page6
Q.17. FACTORS FOR THE ASSESSMENT OFINJURY
According totheprovisions oftheAnti-Dumping Agreement, forthedetermination ofthe
existence ofinjury itisnotsufficient forone(1)single factor orseveral ofthose factors togive
decisive guidance onthedetermination ofinjury. Itisessential thatallfactors come intoplay.
Intheabsence ofspecific provisions, howwillIndia guarantee thefulfilment ofthoseprinciples?
Theprovision ofparagraph (vii)ofAnnexure IIoftheADRules imply thatcases ofthreat
ofinjury areconsidered withspecial care. Itisnotconsidered necessary totranslate eachandevery
provision oftheAgreement intothedomestic law.
Q.18. TIME PERIOD FOR THE LEVY OFFINAL DUTIES
According totheprovisions ofRule 18,subrule (1)oftheCustoms Tariff Rules onthe
Identification ofDumped Articles, finalanti-dumping duties maybeimposed within aperiod
ofthree (3)months. Rule17,subrule (1)oftheRules states thatinvestigations may, under
exceptional circumstances, takeuptoeighteen (18)months.
Ifaninvestigation lastsfortheexceptionally longperiod ofeighteen (18)months, howcan
subrule (1)Rule18oftheCustoms Tariff Rules ontheIdentification ofDumped Articles be
reconciled withtheprovisions ofArticle 5.10oftheAnti-Dumping Agreement?
Subrule (1)ofRule20oftheCustoms Tariff Rules ontheIdentification ofSubsidized Articles
alsostipulates thatfinalcountervailing duties maybelevied within aperiod ofthree months,
andallows eighteen (18)months asthemaximum duration oftheinvestigation forcircumstances
ofanexceptional nature.
Intheeventthataninvestigationisconcludedintheeighteen(18)monthsallowedforexceptional
cases, howcansubrule (1)ofRule20oftheCustoms Tariff Rules ontheIdentification of
Subsidized Articles bereconciled withtheprovisions ofArticle 11.11 oftheAgreement on
Subsidies?
Article 5.10oftheAnti-Dumping Agreement provides thatinvestigations shallbeconcluded
inamaximum period of18months afterinitiation. Thisisreflected inthefirstproviso toRule17
oftheAnti-Dumping Rules. Rule10(1) onlyprovides thattheCentral Government mayimpose anti-
dumping dutywithin three months ofthedesignated authority. Thisruleis,thus, onlyinrespect of
levyofdutyandnotinrespect oftheinvestigation.
Similar isthecasewiththeCVD rules where provisions ofArticle 11.11 oftheAgreement
onSubsidies andCountervailing Measures arereflected inthefirstproviso ofRule19(1). Rule20(1)
onlyallowstheCentralGovernmenttoimposecountervailingdutywithinthreemonthsofthepublication
ofthefinalfindings orbythedesignated authority. Thisthree month period cannot beconsidered
astheperiod ofinvestigation orinvestigation incomplaint bythedesignated authority under Rule19.
Q.19. SUPPRESSION OFPROVISIONAL DUTIES INTHE FINAL FINDING
Provisional duties mayonlybeimposed afteraminimum period ofsixty(60)days, running
fromthedateofinitiation ofaninvestigation, andforaperiod notexceeding nine(9)months.
Subrule (4)ofRule18oftheCustoms Tariff Rules ontheIdentification ofDumped Articles
provides thatintheevent thatthedesignated authority determines, inthefinalfinding, thatG/ADP/Q1/IND/1
G/SCM/Q1/IND/1
Page7
itisnotnecessary tolevyduties, anyprovisional dutywhich hadbeen imposed must be
withdrawn.
Howcanprovisional duties bewithdrawn when thefinalfinding ismade ifthose duties should
nothavebeeninforce atthatdate?
Withregard tosubsidies, theCustoms Tariff Rules ontheIdentification ofSubsidized Articles
provides thatthemaximum duration ofprovisional duties isfour(4)months andthattheymay
notbeimposed before theexpiry ofsixty(60)dayscounting fromthedateofinitiation ofthe
investigation. Subrule (3)ofRule20stipulates thatanyprovisional dutywhich hasbeenlevied
mustbewithdrawn ifinthefinalfinding thedesignated authority determines thatcountervailing
duties should notbeimposed.
Howcanprovisional duties bewithdrawn when thefinalfinding ismade ifthose duties should
nothavebeeninforce atthatdate?
Provisional anti-dumping dutyisimposed inaccordance withtheprovisions ofArticle 7of
theAnti-Dumping Agreement asreflected inRule13oftheADRules. Ifthefinaldetermination is
negative, provisions ofRule21(3) oftheADRules apply and,inaccordance withArticle 10.5ofthe
ADAgreement, theprovisional dutyalready collected isrefunded.
Thesame applies tocountervailing duties also.
Q.20. NON-ACTIONABLE SUBSIDIES -PRE-COMPETITIVE DEVELOPMENT ACTIVITIES
Paragraph (1)oftheexplanation toRule11oftheCustoms Tariff Rules ontheIdentification
ofSubsidized Articles refers to"pre-competitive development activity". Istheinterpretation
of"pre-competitive development activity" thesameasthatgiven infootnote 29oftheAgreement
onSubsidies?
Yes.
Q.21. NON-ACTIONABLE SUBSIDIES -NEUTRAL AND OBJECTIVE CRITERIA
Definition (b),subsection (2)oftheexplanation ofRule11intheAgreement onSubsidies refers
to"neutral andobjective criteria".
Istheinterpretation of"neutral andobjective criteria" thesame asinthedefinition given in
footnote 32oftheAgreement onSubsidies?
Yes.
Q.22. SPECIFIC SUBSIDIES
Annexure IIoftheCustoms Tariff Rules ontheIdentification ofSubsidized Articles gives the
criteria tobeusedindetermining whether asubsidy isspecific ornot.However, itdoesnot
statehowsuchspecificity isdetermined.
Intheabsence ofexplicit provisions, what isthebasis fordeciding onthespecificity ofa
subsidy?G/ADP/Q1/IND/1
G/SCM/Q1/IND/1
Page8
Paragraph 9(3)(c) oftheCustoms Tariff Actof1995("theAct") (G/ADP/N/1 page3provides
forcountervailing duties when itisdetermined thata"subsidy hasbeenconferred onalimited number
ofpersons engaged inmanufacturing, producing orexporting" thesubject merchandise. Rule11(1)(c)
oftheSCM Rule11,stating that,"inmaking itsdetermination thedesignated authority shalltake...
intoconsideration" principles thatreasonably tracktheprovisions ofArticle 2oftheSCM code, except
asdescribed below.
AnnexureIItotheIndianCountervailingDutyRulesprovidesfortheprinciplesfordetermination
ofsubsidy which havebeenconferred onalimited number ofpersons referred toinRule11.
Q.23. CONSULTATIONS AND REMEDIES
Intheabsence ofspecific provisions, howwillIndia guarantee fulfilment oftheprovisions under
Articles 4,7and9oftheAgreement onSubsidies?
Provisions ofArticles 4,7and9oftheAgreement onSubsidies andCountervailing Measures
relate toconsultations andremedies pursuant upon eachconsultation aswellasdispute settlement
provisions. Such consultations aretotakeplace withtheGovernment ofIndia attherequest ofany
WTO Member. TheGovernment ofIndia intends ogiveguarantee toalltheremaining provisions
inthese Articles. Such remedies have notbeen specifically mentioned intheprovisions ofthe
countervailingdutyrulesastheyapplytocountervailingdutyinvestigationsandaremeantforcompliance
bythedesignated authority forconduct ofinvestigation only.