Page 491 - MANUAL OF SOP

Manual of OP for Trade Remedy Investigations

been discussed in Chapter 11 relating to injury analysis in case of AD investigations
which may be applied mutatis mutandis in case of CVD investigation.

INJURY MARGIN
20.54 Rule 19(1)(b) of the CVD Rules provides for recommending the amount
of duty which if levied, would be adequate to remove the injury to the domestic
industry. An amount of duty which can ensure a fair price to the domestic industry
is understood to be adequate to remove the injury of the Domestic Industry on
account of subsidized imports.

20.55 Injury margin represents the injury suffered by the domestic industry on
account of subsidized imports calculated as the difference between the Non-
injurious Price (NIP) of the domestic industry and the landed value of imports of the
subject goods from the countries under investigation. Therefore, a duty levied up to
the injury margin is expected to be the margin adequate to remove the injury of the
Domestic Industry on account of subsidized imports. The injury margin calculation
is important since it affects the level of duties finally recommended because the
Authority will recommend the countervailing duty at the level of the subsidy margin
or injury margin, whichever is less. Therefore, the team has to compute the Non
injurious Price for the DI.

NIP DETERMINATION

20.56 Non-Injurious Price (NIP ) denotes the fair price, which will enable the DI
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to reasonably recover its cost of production and reasonable profit margins, after
taking into consideration all other factors of production which could have affected
the company, but for which subsidized imports are not responsible. It is the price at
which the domestic industry should be able to compete with exporters or foreign
producers of the like product. The NIP is used for calculation of Injury Margin by
comparing the NIP with the Landed Value of the subsidized imports.

20.57 The provisions relating to Lesser duty rule and Injury margin are similar in
both Section 9 and Section 9A of the Customs Tariff Act dealing with CVD and ADD
respectively. Hence the provisions/guidelines for determination of NIP as provided in
Annexure III (as notified on 1 March 2011) read with Rule 17(1)(d) of the AD Rules
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may be applied for CVD investigations also. The applicable Generally Accepted
25 Refer Communication dated 2.3.2006, circulated to the Rules Negotiation Group of WTO as an informal document
(JOB(06)/39) at the request of the delegations of Brazil; Hong Kong, China; India; and Japan on the mandatory
application of the lesser duty rule.
st
26 Notified vide Notification No. 15/2011-Customs (N.T) dated 1 March 2011.
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