. /.WORLD TRADE
ORGANIZATIONG/SCM/W/519
22 July 2002
(02-4033)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
IMPLEMENTATION-RELATED ISSUES REFERRED
TO THE COMMITTEE BY MINISTERS
Review by the SCM Committee of the Provisions of the Agreement on Subsidies
and Countervailing Measures Regarding Countervailing Duty Investigations
Replies of INDIA to Follow-Up Questions Posed by the EUROPEAN COMMUNITIES
to BRAZIL and INDIA1
The following communication, dated 19 July 2002, has been received from the Permanent
Mission of India.
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1. Concerning the proposal by Brazil on period of subsidy allocation for capital goods:
Can Brazil please explain under what conditions the use of the depreciation period stated in the
national legislation would not be required?
2. Concerning the proposal by Brazil on de minimis :  Can Brazil please confirm that this
proposal relates only to retroactive systems of duty collection and not to prospective systems?
3. Concerning the proposal by India on automa tic adjustment of countervailing duties in
case of withdrawal of subsidy schemes:
(a) Can India please state whether under this proposal "withdrawal" of subsidy
schemes would relate only to the repeal of the scheme as such, i.e. for all
beneficiaries, or also to non-eligibility for the exporter claiming the adjustment
(e.g. through change of the eligibility criteria)?
(b) Please elaborate on the possibility to investigate whether the subsidy "has not
been reformulated under another scheme".  Does this cover solely cases wherethe scheme remains unchanged in substance (e.g. form of subsidy unchanged)
but only the name of the programme change s, or does it also include instances
where there is a change of substance in the operation of the programme(s) (e.g. a
grant scheme is abolished but the company can now avail itself of a tax
exemption)?
Reply
Under India’s proposal, withdrawal of subsidy sc hemes would relate to repeal of the subsidy
scheme as such for all beneficiaries and would not be confined to the exporters claiming adjustments.
                                                     
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In India’s view, on being presented with evidence from the exporters regarding withdrawal of the
benefit conferring scheme, the investigating authority may satisfy itself that the scheme has not been
reformulated into another scheme.  Reformulation of a subsidy scheme under another scheme would
cover cases where the scheme remains unchanged in substance, with the type of financial contribution
and the category of potential beneficiary remaining the same as under the original scheme.  In case theinvestigating authority concludes that the original  scheme has remained unchanged in substance and
has been merely reformulated by changing the name of the scheme, there would be no adjustment in
the countervailing duty.  However in case a new subsidy scheme is introduced, it is India’s contention
that this would not lend itself to an expedited review process as various essential elements like
financial contribution, existence of benefit to the recipient, amount of subsidy etc. would need to be
established.  This can be a time consuming exercise.  Such situation is appropriately addressed under
the normal course as provided for under provision of Article 21.2 of the Subsidies Agreement.
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