US Wrong to Find No Use of Indian Import Duty Exemptions Benefit for Exporter, Petitioner Says

An Indian exporter of off-road tires did receive the benefit of import duty exemptions from the Indian government, a petitioner argued in the Court of International Trade on Sept. 9 (Titan Tire Corporation v. U.S., CIT # 23-00233).

Petitioner Titan Tires contested the de minimis rate received by tire exporter Balkrishna Industries in a recent countervailing duty review. It argued that the Commerce Department wrongly found that the exporter hadn’t benefited from the Indian government’s Advanced Authorization Scheme program, which exempts import duties on inputs upon exportation.

By statute, in order to determine that such a program provides no benefit, Commerce must confirm which imported inputs “are consumed in the production of the exported products,” Titan said. It said the department can do so by determining that the “government in question has in place and applies a system or procedure” that does so in a way that is “reasonable, effective for the purposes intended, and is based on generally accepted commercial practices in the country of export.” Otherwise, Commerce must find that the “government in question has carried out an examination of actual inputs involved to confirm which inputs are consumed,” it said.

The department hasn't found that India had a “reasonable or effective system with respect to” the Advanced Authorization scheme, Titan said. Therefore, Commerce determined that the Indian government had actually examined the inputs involved to determine which were consumed, it said.

But this hasn’t occurred, the petitioner said. The other information Commerce used to verify which inputs were consumed in production of the exported product came from “information provided by [Balkrishna] and outside accountants and engineers,” not the Indian government, it argued.

As a result of its inaccurate analysis, Commerce found that the exporter hadn’t benefited from the subsidy and therefore didn’t include the subsidy in Balkrishna’s overall countervailing duty rate, it said. This then meant that all exporters not individually examined received the rate calculated for mandatory respondent ATC Tires, Titan said.