Countervailing duty
Q. What is countervailing duty?- Published on 26 Apr 16a. Subsidies given for export promotion
b. Duties to compensate on for subsidies
c. Taxes on products imported for value addition only
d. Duties on petroleum products
ANSWER: Duties to compensate on for subsidies
- Countervailing duties (CVDs), also known as anti-subsidy duties, are trade import duties imposed under World Trade Organization (WTO) rules to neutralize the negative effects of subsidies.
- They are imposed after an investigation finds that a foreign country subsidizes its exports, injuring domestic producers in the importing country.
- According to World Trade Organization rules, a country can launch its own investigation and decide to charge extra duties, provided such additional duties are in accordance with the GATT Article VI and the GATT Agreement on Subsidies and Countervailing Measures.
