WTO favors with India on imposition of CVD

WASHINGTON (Scrap Monster): The Indian government has decided to demand the United States to remove the CVDs off, about seven items that have been imposed by the tax, by the same criteria as the steel. The World Trade Organization has rejected the  tax on steel, by stating that, the tax was inconsistent with various provisions of the Agreement on the Subsidies and Countervailing Measures.

The government of US used to charge CVD up to  557 percent, on the imports of hot rolled steel coils from Indian steel producers such as Tata Steel, to whom the raw material is supplied by the state run iron ore producer NMDC. The tax was imposed on th9s imports with the assumption that the iron ore provider NMDC supplies the steel making company with subsided iron ore, by making their products artificially cheaper. In short NMDC was considered to be a public body.

According to the rules, a CVD cannot be imposed on the imports from a steel producer if the supplier of the producer is a private company. But in the case of Tata steel, even if NMDC is state run iron ore producer, the company  does not interfere in the government functions or possess any kind of government authority. Hence, according to the rules of the WTO, the iron ore company cannot be stated as a public company.