Section 9 of CTA, 1975 : Section 9: Countervailing Duty On Subsidized Articles

Explanation using Example

Example Application of Section 9 of The Customs Tariff Act, 1975:

Imagine a scenario where Country X provides a subsidy to its domestic manufacturers of solar panels. This subsidy includes a direct transfer of funds to the manufacturers, allowing them to sell solar panels at a lower price in the international market. Company A in Country X exports these subsidized solar panels to India, where they are sold at a price that undercuts the Indian solar panel manufacturers.

The Indian government, aiming to protect its domestic industry, conducts an inquiry and finds that the imported solar panels are indeed being subsidized by Country X. As a result, the Central Government of India, under Section 9 of The Customs Tariff Act, 1975, issues a notification in the Official Gazette imposing a countervailing duty on the imported solar panels from Country X. This duty is equal to the amount of the subsidy provided by Country X to its manufacturers, thereby leveling the playing field for Indian producers.