Page 494 - MANUAL OF SOP

Countervailing Duty Investigations

subsidy. Sometimes, it is possible that the alleged program is known by different
names other than the one specified by the applicant.

20.64 The information and evidence is required to be co-related with PUC if the
program is specific to the PUC or specific to the inputs used in the PUC. If the
program is not specific to the PUC (like linked to geographical location), question
of providing information or evidences relating to PUC may not be critical. It may
be added here that complete details of subsidies or grants received by the alleged
entity and its related entities (including holding company etc) must be obtained
during investigations. For example, if an entity related to the subject entity obtains
grants/subsidy on any intermediate to the input or receives any other similar benefit
like free or subsidized land, then such related entity might pass on the said benefit
to the subject entity. Similarly any subsidy or grant received by the subject entity
on any captive input will also tantamount to subsidy for its downstream products
including PUC.

20.65 As regards non-cooperating units, it would be reasonable to proceed on the
basis of an assumption that an exporter/producer entitled for the benefits would
have availed the benefit available under the program. It is for the cooperative
exporter/producer to establish that despite eligibility, it has not availed the benefit.

20.66 If some schemes are related to specific geographical areas or cities and
no cooperation is received from producers/exporters from that geographical area,
all units in that geographical area, if otherwise eligible, shall be assumed to have
availed the benefits.
20.67 Another issue which must be considered is the benefits from non-recurring
subsidies received anytime in the past (prior to POI) like free land or subsidized
construction etc. It is logical that these benefits should also be considered over
the average useful life of the concerned tangible/ intangible assets used in the
production of subject article.

20.68 The Agreement foresees two methodologies to calculate total subsidy
amount in CVD context namely, Benefit to recipient (how much advantage to the
recipient, compared with price at which it could obtain from the market); and Cost
to government (how much did it cost the government to provide the concerned
subsidy). However, as per Rule 12 of the CVD Rules, the Indian Authority has been
using the ‘benefit to recipient’ approach so far.

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