NEW DELHI : The Commerce Ministry(MoCI) has started an exercise to help Indian exporters keep proper documentation to deal with US countervailing duty cases on domestic products, an official said.
As part of the exercise, teams of the Directorate General of Foreign Trade (DGFT) and Directorate General of Trade Remedies (DGTR) are working on a roadmap to work on the kind of documentation that needs to be maintained by Indian exporters.
Before imposing countervailing or anti-subsidy duty (CVD), a country carries out detailed investigations on products which it believes that its trading partner is subsidising for export purposes. Subsidising exports is a kind of unfair trade practice.
Countervailing duties can only be imposed if the investigating agency of the importing country determines that the imports of the product in question are subsidized and are injuring a domestic industry.
Imposition of this duty does not prohibit or restrict imports. World Trade Organisation (WTO) allows its member countries to use these tools to provide a level-playing field to their domestic players.
The US has conducted countervailing investigations and submitted final determination on three Indian products — paper file folders, common alloy aluminum sheet, and forged steel fluid end blocks.
The European Commission too has conducted a similar probe on certain graphite electrode systems from India.
The Indian government and the affected exporters have strongly defended the subsidy allegation against various programmes and schemes of the government, both at central and state level, in their written and oral responses during the conduct of investigations, the official said.
While imposing CVD, it has been stated that there is a need for a reasonable and effective system to confirm inputs, consumption amount and imposed indirect taxes.
The official said that products which the US have investigated involved reimbursement of levies like electricity duty, VAT on fuel or APMC taxes.