Page 361 - MANUAL OF SOP

Manual of OP for Trade Remedy Investigations

producer (based on cost of production excluding returns) for calculation of cost of
production.

CONSTRUCTED NORMAL VALUE (CNV)

13.19. Where the NV cannot be determined on the basis of QR of the co-operative
producer exporter, then the Authority has to resort to CNV as discussed below:

13.19.1 The Authority may follow the methodology given under Section 9A(1)
(c)(ii)(b) in which the cost of production, along with reasonable additions for
administrative, selling and general costs and for profits for construction of NV. The
construction of COP and SG&A is done on best available information at the disposal
of the Authority.

13.19.2 In cases, where there is no response from any producer or exporter is
filed, then normal value has to be calculated on the basis of the best information
available. The key elements for Constructing Normal Value are :
5
(i) DI’s cost of production of the like articles;
(ii) Selling, general and administrative costs that would have been incurred had
the goods sold in the domestic market of the exporting country; and

(iii) An amount for profit that the exporter would have earned had the goods
sold in the domestic market.
13.19.3 In the cases where the response is incomplete, or the responding producer
is declared non co-operative or operating under non market conditions, then CNV
is computed with norms of the DI or the norms of most efficient domestic producer.
The various elements and steps for computation are:

(i) Consumption norms of the most efficient applicant Indian domestic
producer are considered;
(ii) International prices of raw material are obtained from the World Trade
Atlas or from other authentic sources of international repute, preferably
published by the Government Authority of the exporting country. The raw
materials prices could also be adopted from the records of the DI, if they
are using imported raw materials, but adjustments with regard to freight,

5 Please refer to Para XIII of Chapter 24 for WTO Jurisprudence.

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