Final findings of SSR of CVD investigation of new pneumatic radial tyres for buses and lorries from China PR

REGD. No. D. L.-33004/99 The Gazette of India CG-DL-E-24042024-253833 EXTRAORDINARY PART I—Section 1 PUBLISHED BY AUTHORITY No. 112] NEW DELHI, TUESDAY, APRIL 23, 2024/VAISAKHA 3, 1946 2667 GI/2024 (1) MINISTRY OF COMMERCE AND INDUSTRY (Department of Commerce) (DIRECTORATE GENERAL OF TRADE REMEDIES) NOTIFICATION New Delhi, the 22nd April, 2024 FINAL FINDING Case No. CVD-SSR-13/2023 Subject: Sunset review investigation of countervailing duty concerning imports of "new pneumatic radial tyres for buses and lorries" originating in or exported from China PR. F. No. 7/30/2023-DGTR.—Having regard to the Customs Tariff Act 1975 as amended from time to time (hereinafter referred as the 'Act') and the Customs Tariff (Identification, Assessment and Collection of Countervailing Duty on Subsidized Articles and for Determination of Injury) Rules, 1995 thereof, as amended from time to time (hereinafter referred as the ‘CVD Rules' or the 'Rules'). A. BACKGROUND 1. An anti-subsidy investigation into imports of "new pneumatic radial tyres for buses and lorries" (hereinafter referred to as "subject goods" or "product under consideration") from China PR (hereinafter referred to as "subject country") was initiated by the Authority vide notification no. 6/8/2018-DGAD dated 27th March 2018. Following a detailed investigation, the Designated Authority concluded that the subsidy provided by the Chinese government to the producers of the subject goods were countervailable in nature and the subject goods were exported from China PR at subsidized prices causing injury to the domestic industry. The Authority recommended the imposition of definitive countervailing duties on the imports of the subject goods from the subject county vide Final Finding No. 6/8/2018-DGAD dated 25th March 2019. The definitive measures were imposed by the Ministry of Finance vide Customs notification no. 1/2019-Customs (CVD), dated 24th June 2019. Pending the conclusion of the present review, the countervailing duty on China PR was extended vide notification no. 01/2024-Customs (CVD), dated 11th March, 2024 till 23rd July, 2024. 2. In terms of Section 9 (6) of the Act and Rule 24 (3) of the CVD Rules, the countervailing duties imposed shall, unless revoked earlier, cease to have effect on expiry of five years from the date of such imposition, and the Authority is required to review whether the expiry of the said countervailing duty is likely to lead to continuation or recurrence of subsidisation and injury to the domestic industry. In accordance with the same, the Authority is required to review, on the basis of duly substantiated request made by or on behalf of the domestic industry as to whether there is a need for the continued imposition of the countervailing duty, and whether the expiry of the duty is likely to lead to continuation or recurrence of subsidisation and injury. 3. And whereas, Automotive Tyres Manufacturers Association (“ATMA”) has filed an application on behalf of the domestic producers namely Apollo Tyres Limited, J.K. Tyre Industries Limited and MRF Limited (hereinafter collectively referred to as "applicants") before the Designated Authority in accordance with the Act and the Rules, requesting initiation of the sunset review investigation concerning imports of subject goods originating in or exported from the subject country. 4. The applicants have sought the continuation of the countervailing duty against imports of the subject goods from the subject country. The request was based on the ground that the expiry of the countervailing duty was likely to result in continuation of subsidized imports of the subject goods and consequent likelihood of recurrence of injury to the domestic industry. 5. And whereas, the Authority on the basis of sufficient evidence submitted by the petitioners, issued a public notice vide notification no. 7/30/2023-DGTR, dated 29th December 2023 published in the Gazette of India, Extraordinary, initiating the subject investigation in accordance with the Rules, to determine the existence, degree and effect of the alleged subsidy and to recommend the amount of anti-subsidy/countervailing duty, which, if levied, would be adequate to remove the injury to the domestic industry. 6. The scope of the present review covers all aspects of the final finding notification no. 6/8/2018-DGAD dated 25th March 2019. B. PROCEDURE 7. The procedure described herein below has been followed by the Authority regarding the subject sunset review. i. The Authority, under the above Rules, received a written application from the applicants, as the domestic industry contending likelihood of continuation of subsidised imports and recurrence of injury to the domestic industry on imports of the product under consideration in India. ii. The Authority notified the embassy of China PR in India about the receipt of the review application before initiating the investigation in accordance with Rule 6(5). iii. The Authority in terms of Article 13 of WTO Agreement on Subsidies and Countervailing Measures (hereinafter referred to as “ASCM") provided opportunity to the Government of China PR (hereinafter referred to as “GoC”) for pre-initiation consultations that were held with its representatives on 15th December, 2023. The comments of the representatives of the Government of the subject country were taken on record. iv. While GoC contended that there is lack of evidence or claimed that alleged policies are not countervailable within the meaning of the ASCM as they are internationally recognized and well-accepted in nature, whereby there is no financial contribution, nor do they confer benefit to specific enterprises or industries. The GoC stated that some Chinese laws and regulations cited for alleged subsidy programs have been either amended or repealed but the GoC has not substantiated their claims. V. The Authority issued a public notice dated 29th December 2023 published in the Gazette of India, Extraordinary, initiating the sunset review of anti-subsidy investigation concerning imports of the subject goods originating in or exported from the subject country. vi. The Authority sent a copy of the initiation notification dated 29th December 2023, to the Chinese embassy in India, the known producers, and exporters from China PR, known importers/users in India and other interested parties, as per the available information. The interested parties were advised to provide relevant information in the form and manner prescribed and make their submissions known in writing within the prescribed time limit. vii. The Authority provided a copy of the non-confidential version of the application to the known Chinese producers/exporters and to the embassy of China PR in accordance with Rule 7(3) of the Rules. viii. The Authority issued economic interest questionnaire (EIQ) to all interested parties and the concerned ministry. Response to EIQ was submitted only by the domestic industry. ix. The Authority sent a questionnaire to the GoC seeking relevant information in the form and manner prescribed regarding various schemes/programs where countervailable benefit might have been conferred onto the Chinese producers/exporters of the product under consideration. The response filed by GoC was taken on record and examined by the Authority. x. The Authority sent exporter's questionnaires to known producers/exporters in China PR, in accordance with Rule 7(4) of the Rules. a. Shandong Yinbao Tyre Group Co. Ltd b. Shandong Wando Boto Tyre Co. Ltd c. Triangle Tyre Co. Ltd. d. Zhongce Rubber Group Co. Ltd. e. Shandong Yongfeng Tyres Co. Ltd. f. Jiansu General Technology Co. Ltd. (General Science) g. Guangzhou Pearl River Rubber Tyre Co. Ltd. h. Giti Tyre (Anhui) Co. Ltd. i. Shandong Province Sanli Tire Manufacture Co., Ltd j. Shandong Haohua Tire Co., Ltd. k. Prinx Chengshan Tire Company Ltd. l. Kumho Tire Co. Inc. m. Kumho Tire (Tianjin) Co., Inc n. Nanjing Kumho Tire Co., Ltd o. Sailun Jinyu Group Co. Ltd p. Double Coin Tire Group Ltd. q. Tianjin Wanda Tyre Group Co., Ltd. r. Taishan Shandong Tire Co., Ltd. s. Jianxin Tire (Fujian) Co., Ltd. t. Guizhou Tire u. Sichuan Haida Rubber Group Co. Ltd v. Shengtai Group Co., Ltd. w. Shan Dong Jin Yu Industrial Co., Ltd. x. Shandong Yinbao Tyre Group Co., Ltd. y. Shandong Xingyuan International Trading Co., Ltd. z. Shandong Hengfeng Rubber & Plastic Co., Ltd. aa. Dingying Zhong Yi Rubber Co., Ltd. bb. Haoyou Tyre Co., Ltd. cc. Doublestar dd. Shandong Linglong Tyres ee. Double Money Group (Chongqing) Tire Co. Ltd. ff. Xingyuan Tyre Group Co. Ltd. xi. In response to the above notification, the following producers/exporters have responded and submitted/filed exporters' questionnaire responses and/or legal submissions: a. Zhongce Rubber Group Co. Ltd. b. Zhongce Rubber (Tianjin) Co., Ltd c. Shandong Yinbao Tyre Group Company Ltd. xii. The Authority has examined exporter questionnaire responses filed by the above participating exporters. It was found that the responses filed are incomplete and not in the form prescribed by the Authority. None of the exporters have filed response to Part-II of the Exporter Questionnaire which is pertinent for sunset reviews. xiii. Questionnaires were sent to the known importers/users/ associations of the subject goods in India calling for necessary information in accordance with the Rules. a. All India Motor Transport Congress b. Society of Indian Automobiles Manufactures c. All India Transporters Welfare Association d. G. Industries e. A.S. & Company f. Celite Tyre Corporation g. AGK Digital Private Limited h. Akhil Impex Building i. Alliance Traders j. Amit Enterprises k. Arora Enterprises l. Asis Enterprises m. Bhagwatee Impex n. Chadha Tyre Traders o. Chhabra Sales Corporation p. Dashmesh Trading Co q. Deep Enterprises r. Delhi Tyre Shoppe s. Eknoor Tyres Private Limited. t. Electro Link u. Ess Infraproject Private Limited v. Fine Traders w. Fish Aquarium Home x. Ganpati Overseas y. Genetic Sales Corporation z. Globus Corporation aa. Gupta Tyre House bb. H. D. International cc. H.S. Arora & Co. Ltd. dd. H.S. International ee. Harpreet International ff. Hayer Trading Co. gg. Hind Traders hh. Hind Traders ii. Indian Rubber Manufacturers Research Association jj. Indo China Impex kk. Indo Silicon Electronics Pvt. Ltd. ll. M S International mm. J.M. Shama Designs nn. Jaipex Ltd. oo. Jitender Overseas pp. Juneja Agencies qq. K.C. Impex rr. Kabeer Components Pvt Ltd ss. Kaks And Bills Pvt Ltd tt. Kingston Enterprise uu. Lokesh Impex vv. Vrinda Overseas ww. Mohan Enterprises xx. Nand Rubber Pvt. Ltd. yy. National Trading Company zz. New Vikas Tyres aaa. Pahwa Distributors bbb. Paras Auto Parts ccc. Pardeep Import Export ddd. Pioneer Trading Corporation eee. Prem Trading Company fff. Pricon Engineering Services ggg. R C International hhh. R S Enterprises iii. Radhey Kishan Enterprises jjj. Rajpal Roadlines Pvt Ltd kkk. Rameshwar Dass & Co. lll. Rangi Road Carrier mmm. Renu Raj Trading nnn. Roadlion International ooo. Royal Traders ppp. Rynaa Overseas (India) qqq. S R Enterprises rrr. S. S. And Sons sss. S.K. International ttt. Saarwan Enterprises uuu. Sabharwal Trading Company vvv. Sachin Prasad Yadav www. National Trading Company xxx. Samar Traders Pvt. Ltd. yyy. Sanjog Impex zzz. Sanmati Portex Pvt Ltd aaaa. Sat Guru Traders bbbb. Saveer International cccc. Shiv Shakti Enterprises dddd. Shivaik Exim eeee. Simran India Inc. ffff. Simran Traders gggg. Som Projects & Associates hhhh. Sri & Co iiii. Sri Kumaran Traders jjjj. Zafco India Pvt. Ltd. kkkk. Sumant Bachhawat llll. Sun Traders mmmm. Supreem Trading Corporation nnnn. Surodhya Sales oooo. Trans Tyres (India) Pvt. Ltd. pppp. Uniglory International qqqq. Vaan Sales India Pvt. Ltd rrrr. Vikas Retail Private Limited ssss. Vortex Rubber Industries Pvt. Ltd. xiv. In response to the above notification Tyre Importers Welfare Association, claiming to be the importer's association of the subject goods, registered as an interested party. However, it did not file any legal submission or user/importer questionnaire response or economic interest questionnaire response. Aggarwal Tyres also registered as an interested party, claiming to be an importer of the subject goods. It filed a legal submission to exclude imports under HS code 40118000. However, it did not file any response to user/importer questionnaire or economic interest questionnaire. None of these parties appeared before the Designated Authority during the oral hearing. xv. A list of all the interested parties was uploaded on the DGTR's website along with the request therein to all to email the non-confidential version of their submissions to all other interested parties. xvi. The Authority, vide communication dated 6th February 2024, upon request from certain interested parties, extended time to file questionnaire responses/ comments, to 7th March 2024. xvii. Exporters, producers, and other interested parties who have not responded to the Authority nor supplied sufficient information relevant to this investigation, have been treated as non-cooperative. xviii. The Authority accepted the confidentiality claims, wherever warranted, after due examination and such information have been considered confidential and not disclosed. xix. The applicants proposed the period of investigation as 1st April 2022 to 30th June 2023 (15 months) for the purpose of the present investigation. The applicants submitted that consideration of July 2022 – June 2023 as the investigation period would result in significant practical difficulties for the preparation of the costing data for the applicants domestic industry as these are multi-product companies having several plants. xx. The applicants companies further submitted that there would be no material difference in the merits of the case as the present case is based on continuation of subsidies and likelihood of injury which do not have any bearing on the period considered as POI. The Authority examined import volume and import price from the DGCI&S data considering the period April 2022 to June 2023 (annualised) and July 2022 to June 2023. It was seen that there was no material difference between import volume, value, and CIF price. In addition, the present investigation is concerning continuation of subsidies and likelihood of injury. The Authority has therefore, determined to accept the period of investigation proposed by the applicants which is 1st April 2022 to 30th June 2023 (15 months). xxi. Request was made to the Directorate General of Commercial Intelligence and Statistics (DGCI&S) to arrange transaction-wise details of imports of the subject goods for the past three years and the period of investigation (POI) and post-POI, which was received by the Authority. The Authority has relied upon DGCI&S transaction wise data for the required analysis after due examination of the transactions. xxii. Optimum cost of production and cost to make & sell the subject goods in India based on the information furnished by the domestic industry on the basis of Generally Accepted Accounting Principles (GAAP) was worked out so as to ascertain if countervailing duty lower than the subsidy margin would be sufficient to remove injury to the domestic industry. xxiii. Verification of the information provided by the domestic industry to the extent deemed necessary was carried out by way of on the spot and desk study. Only such verified information, with necessary rectification, wherever applicable, has been relied upon for the purpose of this final finding. xxiv. The Authority held oral hearing on 19th March, 2024 to provide an opportunity to the interested parties to present the information orally in accordance with Rule 7(6). Oral hearing was held in hybrid mode. All the parties that presented their views orally were advised to file their submissions in writing by 23rd March, 2024. The interested parties were allowed to offer rejoinder to the submissions made by other interested parties latest by 27th March, 2024. xxv. A disclosure statement in terms of Rule 18 of CVD Rules was issued on 16th April 2024. Keeping in view the impending deadline interested parties were granted time till 20th April 2024 to provide their comments to the disclosure statement. The comments to disclosure statement received from the interested parties have been considered, to the extent found relevant and non-repetitive, in this final finding. xxvi. The submissions made by the interested parties during the course of this investigation to the extent found relevant have been considered by the Authority, in establishing essential facts under consideration. xxvii. Information provided by the interested parties on confidential basis was examined with regard to the sufficiency of the confidentiality claimed. On being satisfied, the Authority has accepted the confidentiality claims, wherever warranted, and such information has been considered as confidential and not disclosed to other interested parties. Wherever possible, parties providing information on confidential basis were directed to provide sufficient non-confidential version of the information filed on confidential basis. xxviii. Wherever an interested party has refused access to or has otherwise not provided necessary information in a timely manner during the course of the present investigation, or has significantly impeded the investigation, the Authority has considered such parties as non-cooperative and recorded the findings on the basis of the facts available. xxix. '***' in this final findings represents information furnished by interested parties on a confidential basis, and so considered by the Authority under the Rules. xxx. The exchange rate adopted by the Authority for the subject investigation is US $1= INR 81.47. C. LEVEL OF COOPERATION BY GOVERNMENT OF CHINA PR 8. The Authority notes that adequate opportunity was provided to the Government of China PR, through written communication and consultation, to provide relevant information concerning existence, operations & administration of various subsidy schemes contended by the applicants, countervailability of the same vis-à-vis the WTO ASCM and Indian Rules, and benefits availed by the Chinese producers/exporters under these schemes. The response filed by Government of China has been taken on record and examined by the Authority. D. PRODUCT UNDER CONSIDERATION AND LIKE ARTICLE E.1. Submissions made by other interested parties 9. The submissions made by other interested parties regarding the product under consideration and like article are as follows: i. Participating exporters have not exported the PUC. ii. The present investigation concerns new pneumatic radial tyres used in buses and lorries/ trucks. It does not cover tyres used in construction, mining or industrial handling vehicles and machines. Scope of the PUC cannot be expanded in a sunset review. iii. Imports under HS Code 40118000 should be excluded as it covers 'new pneumatic tyres used in construction, mining or industrial handling vehicles and machines. iv. The Authority is not empowered to investigate issues concerning misclassification of imported goods. v. The domestic industry should have filed mid-term review or anti-circumvention application to include imports under additional HS code. vi. In the case of Sheet Glass (Final Findings dated 21st February 2020), the Authority rightfully decided not to include additional HS codes in a sunset review in view of the decision of the Gujarat High Court in Ajanta Pvt. Ltd. v. Union of India. vii. In cases where mining/ industrial tyres can also be fitted onto trucks/lorries, they ought to be classified under HS code 40118000 as per General Rules for Interpretation of the First Schedule of Customs Tariff. viii. As per decision of the CESTAT in M/s. The Tyre Mark Versus Commissioner of Customs, Bangalore, 2021, tyres ought to be classified on the basis of their dominant use. ix. The domestic industry has not provided any evidence to show misdeclaration of goods. x. WCO decision is inapplicable as it holds that tyres having maximum speed of 110 km/hr are to be classified under HS code 40112010. The exporters are exporting tyres of speed limit 65 km/hr. E.2. Submissions made by the domestic industry 10. The submissions made by the applicants regarding the product under consideration and like article are as follows: i. The present investigation being a sunset review investigation, the scope of the product under consideration remains the same as defined in the original investigation. ii. Upon consideration of same product description and size as was considered in the original investigation, product under consideration would be found in both HS codes 40112010 and 40118000 in recent years. iii. Upon consideration of the import statement of HS code 40118000 during original investigation it would be evident that the PUC were not imported from China PR under this code. It is only a recent phenomenon undertaken by Chinese exporters to avoid payment of duties. iv. Significant imports of subject goods have been reported under tariff classification 40118000. Such imports match the product description and size which was considered as the PUC in the original investigation. These imports have increased substantially during the injury period as no CVD is being levied on these imports. V. The purpose of CVD is to provide remedy to the domestic industry against imports of “a product" that has been imported in the country at subsidised price. The classification of the product under which such imports occurred is entirely immaterial. vi. The Authority ought to extend CVD on imports of the PUC under tariff code 40118000. Such recommendation to include additional HS code would not amount to expansion of product scope. It is merely a measure to ensure collection of duty and stop duty avoidance through misdeclaration of customs classification. vii. As per Rule 4(d), the duty of the Authority is to identify the product to enable determination by MOF. It is not the duty of the Authority to prescribe HS classification. The Authority is required to merely describe the PUC. Designated Authority prescribes HS codes only to intimate MOF with regard to the HS codes under which PUC data was considered for determination, and to assist the MOF to make a determination. viii. The Authority has added additional HS codes in a sunset review time and again. These include sunset reviews concerning "Colour Coated/Pre-painted flat products of alloy or non-alloy steel from China (2021)", "Electrical Insulators from China (2019)”, “Viscose Filament Yarn from China (2018)", and "Poly Vinyl Chloride (PVC) Paste/Emulsion Resin from Korea RP, Taiwan, China PR, Malaysia, Thailand, Russia and European Union (2016)". ix. Gujarat High Court's decision in Ajanta Pvt. Ltd. v. Union of India (dated 4-11-2015) highlights the importance of including all possible HS codes to ensure collection of duty. The Honourable High Court held that the demand notice to levy anti-dumping duty from CBIC is without authority if the anti-dumping duty is levied in respect of HS codes not specified in the customs notification. Thus, this case pertains to chargeability and collection of duty. The DGTR is concerned with investigation, determination, and recommendation. The decision does not pertain to the inherent power of the Designated Authority to recommend collection of trade remedial measures through recommending additional HS codes. DGTR's practice regarding precedence of product definition over tariff classification remains the same. x. The scope of the PUC is determined by rim diameter of tyres. It is not based on application of vehicle. So long as a new pneumatic radial tyre having rim diameter above 16 inches can be used in a bus lorries/truck, it is included within the scope. xi. As per World Customs Organization's Classification decision in 67th Meeting (2021), certain tyres having similar specification to radial tyres for buses and lorries but used in vehicles for transportation of goods in construction, mining or industry applications are also to be classified under HS code 40112010. xii. Participating exporters are misrepresenting that they have not exported the PUC. The applicants have analysed transaction wise import data from market intelligence which shows significant imports of the PUC under HS code 40118000 by both Zhongce and Shandong Yinbao. xiii. The authorities across the world are taking proactive actions to counter duty avoidance. Recently in February 2023, Eurasian Economic Union concluded that Chinese exporters are circumventing anti-dumping duty on TBR tyres. To counter circumvention, the Authority broadened the scope of its anti-dumping duty to include tyres for trucks, buses and trolleybuses, dump trucks, truck trailers and semi-trailers. An anti-dumping duty was also extended to imports under additional HS code 8708.70.990.9 as it was found that TBR tyres are exported in Eurasian Economic Union as tyre and wheel assemblies. xiv. The domestic industry is selling the like article to the products on which domestic industry has sought inclusion. Allowing imports of these products without CVD only because these are reported under 40118000 would defeat the very purpose for which the present CVD is being proposed for extension. xv. The domestic industry had earlier filed anti-circumvention petition and the DGTR has not considered the same on the grounds that SSR is being undertaken and the issue can be addressed therein. Therefore, the information and evidence presented in the anti-circumvention application ought to be considered in this investigation. xvi. The exporters have misled the authority in contending that they have exported NPUC in the present period. The import data shows export of the PUC. xvii. Majority of the supply made by the exporters during the POI are actually imports of the PUC. xviii. It was open for the exporter to present the information and then contend that it pertains to NPUC. The exporter chose not to provide any relevant information, and merely made statements that they have supplied NPUC. This is blatant suppression of information and directly covered by the Hon'ble Supreme Court's decision in Designated Authority vs Haldor Topsoe [2000 120 ELT 11 SC] wherein the Court held that the party is obliged to first provide relevant information before assuming any evidence or fact to be final. The authority should apply adverse facts to the exporter and recommend residual duty on the exporter. xix. The usage of tire in the Country shows that the imported product has in fact been used for fitment in buses and lorries. xx. Imports under HS code 40118000 during the POI of original investigation do not show imports of the product that are now being reported in this code. D.1. Examination of the Authority 11. The scope of product under consideration in the original investigation was defined as follows: "8(a)....... Accordingly, the product under consideration in the present investigation is “New/unused pneumatic radial tyres with or without tubes and/or flap of rubber (including tubeless tyres), having nominal rim dia code above 16” used in buses and lorries/trucks”. The scope of the product under consideration includes both tube type and tubeless tyres. In tube type tyre, tyre is used along with one tube and one flap in a vehicle. One tyre, one tube and one flap are together sold as a “tyre set” and described as “TTF.” The term “TTF” is prevalent in the industry, to denote a "tyre set.” Tyre, tube, and flap jointly render the function of “tyre” in a vehicle. Sale of tyre, tube and flap are primarily on “TTF” or “tyre set” basis. Tubeless radial tyres, where tube and flap are not required, are also within the scope of this investigation." (b) The scope of the imported product includes only radial tyres used in buses and lorries / trucks. Tyres are generally used in various kinds of vehicles such as trucks, buses, lorries, light commercial vehicles, passenger car, jeep, tractor, two-wheeler, three-wheeler, animal pulled vehicles, earthmover, industrial tyres, aircrafts etc. However, the product under consideration is only that type of tyre that is used in buses &lorries / trucks. All other types of tyres are beyond the scope of the product under consideration in the present investigation. (c) Product under consideration is classified under chapter 40 of the Customs Tariff Act, 1975, Tyres are classified under customs sub-heading 40112010 whereas tubes and flaps are under 40131020 and 40129049 respectively. The customs classification is indicative only and in no way binding upon the product scope. (d) New/unused pneumatic radial tyres produced by the domestic industry are like article to the new/unused pneumatic radial tyres imported from China PR. The Authority holds that there is no known difference in the subject goods produced by the domestic Industry and that exported from China PR. Subject goods produced by the petitioners and imported from China PR are comparable, collectively, and cumulatively, in terms of product characteristics, manufacturing process & technology, functions & uses, product specifications, pricing, distribution & marketing and tariff classification of the goods. The Authority holds that the product under consideration produced by the applicants domestic industry is like article to the subject product under consideration imported from subject country in accordance with the Anti-Subsidy Rules." 12. The present investigation being a sunset review investigation, the scope of the product under consideration remains the same as defined in the original investigation. The Authority considers that the customs classification is only indicative and is not binding on the scope of the PUC investigation. The Authority considers imports of the product under consideration, irrespective of its classification. 13. In the original investigation, the Authority had considered product description reported in the import transactions and ascertained whether the same pertains to the product under consideration. It is noted that the imports of the product under consideration were being made after specifying the size of the tyre. 14. The product under consideration is classified under Chapter 40 of the First Schedule to the Customs Tariff Act, 1975. Tyres are classified under HS code 40112010 and tubes and flaps are classified under HS codes 40131020 and 40129049 respectively. 15. The Authority called upon DGCI&S transaction-wise import data to examine imports of subject goods under HS codes 40112010, 40131020, 40129049 and 40118000. It is seen that significant imports of tyres having rim diameter above 16 inches which are typically used in buses, trucks and lorries have been reported under HS code 40118000. Products of these descriptions were considered product under consideration at the time of original investigation and included in quantifying volume and value of the imports. Whereas products of these descriptions were earlier being reported under 40112010, products of these descriptions are also being reported under 40118000. The Authority considers that if some products have been imported under different classification, even though these carry the same description as the description of the product under consideration considered by the Authority, the same cannot be excluded for the purpose of the determination. 16. Even World Customs Organization's Classification decision in 67th Meeting (2021) clarifies that certain tyres having similar specification to TBR tyres but used for vehicles for transportation of goods in construction, mining or industry applications are also to be classified under HS code 40112010. Thus, even if TBR tyres can also be used for mining or other industrial applications, they are to be treated as TBR tyres under HS code 4011201. 17. As regards the decision of CESTAT in M/s. The Tyre Mark Versus Commissioner of Customs, Bangalore, 2021, the Authority notes that it is instructive for the purpose of classification of tyres. In the present, the primary contention is not customs classification of tyres. In the present case, the Authority has to determine if certain imports under 40118000 are covered within product scope for the purpose of levying of CVD. The Authority has examined these imports on the basis of description given in the import data and has considered these products under consideration only if these carry the description as was adopted at the time of original investigation. 18. As regards the decision of Gujarat High Court in the matter of Ajanta Pvt. Ltd. vs. Union of India, the Authority notes that the said decision is with regard to chargeability of anti-dumping duty in force, and is not applicable to the present case. It has no bearing on Authority's established practice of considering customs classification as indicative, and not binding on the scope of the PUC. The decision holds that the revenue authorities can levy anti- dumping duty only in respect of tariff codes specified in the customs notification. In fact, this decision goes on to show the criticality of including all possible HS codes to fulfil the purpose of the duty being imposed. The Authority is however required to consider all such imports which pertain to the product under consideration, irrespective of the classification under which these were reported. Further, the countervailing duty to be charged only on those products which fall within the scope of the product under consideration. If some other products are reported on such classification, the same would not be subject to countervailing duty. 19. The Authority is not restrained from including a HS code in a sunset review investigation, if the information on record shows that the imports of the product have been reported in that HS code. The Authority is governed by the description of the product under consideration, irrespective of the classification where these have been imported. If a product has been imported in more than one HS code, and the same has been allowed by customs authorities, the same in itself establishes possibility of classification of that product under more than one HS code. The scope of sunset review is not narrower than a mid-term review in so far as this aspect is concerned. This can be seen from past DGTR practice in cases of "Poly Vinyl Chloride (PVC) Paste/Emulsion Resin from Korea RP, Taiwan, China PR, Malaysia, Thailand, Russia and European Union (2016)", and in the matter of mid-term review relating to “Natural Mica Pearl Industries Pigments excluding cosmetic grade" from China PR (2023)". 20. As regards reference to final findings of the DGTR in the matter of Sheet Glass (2020), the Authority notes that during the original investigation, the Authority recommended duty under HS codes 70042011, 70042019, 70031290, 70031990, 70033090, 70042099, 70049019, 70049099, 70052110, 70053090, 70091090, 70091010, 70099100, 70119090. The Ministry of Finance imposed duty in respect of HS codes 70042011, 70042019 only. During the sunset review, the Authority did not include additional HS codes as Ministry of Finance did not impose duty on other HS codes despite the Authority's recommendations. 21. The table below shows the imports of the subject goods in the HS Code 40112010 and 40118000: +----------+-----+--------------+--------------+-------------+-----------+ | Period | Unit| HSN 40112010 | HSN 40118000 | Other Codes | Total | +==========+=====+==============+==============+=============+===========+ | 2019-20 | MT | 13,436 | 1,264 | 325 | 15,025 | +----------+-----+--------------+--------------+-------------+-----------+ | 2020-21 | MT | 1,325 | 2,782 | 93 | 4,200 | +----------+-----+--------------+--------------+-------------+-----------+ | 2021-22 | MT | 123 | 7,783 | 274 | 8,179 | +----------+-----+--------------+--------------+-------------+-----------+ | POI (A) | MT | 0 | 20,634 | 516 | 21,150 | +----------+-----+--------------+--------------+-------------+-----------+ 22. In view of the above, the Authority concludes that the scope of the product under consideration is same as was notified in the original investigation, i.e., “New/Unused pneumatic radial tyres with or without tubes and/or flap of rubber (including tubeless tyres), having nominal rim dia code above 16" used in buses and lorries/trucks, classified under customs sub-heading 40112010, 40131020 and 40129049." The customs classifications are indicative only and the measure shall be applicable if the imported product confirms to the description of the product under consideration. However, it is clarified that if the PUC is imported under HS code 40118000, the same shall be subjected to the measures. 23. There are no known differences in the subject goods produced by the domestic industry and that exported from the subject country. The present investigation is a sunset review investigation and the Authority had earlier held that the goods supplied by the domestic industry are like article to the PUC. 24. The Authority earlier at the time of original investigation held that the subject goods produced by the domestic industry are comparable to the goods imported from the subject country in terms of technical specifications, manufacturing process & technology, functions & uses, pricing, distribution & marketing, and tariff classification of the goods. The two are technically and commercially substitutable. None of the interested parties have contended that the goods supplied by the domestic industry is not a like article to the PUC. Therefore, for the purpose of the present investigation, the subject goods produced and supplied by the domestic industry are being treated as 'like article' to the subject goods being imported from the subject country. E. Scope of the domestic industry and standing E.1 Submissions made by the other interested parties 25. The submissions made by other interested parties regarding domestic industry and standing are as follows: i. The application does not contain sufficient evidence to support standing of the applicants to represent domestic industry. E.2 Submissions made by the domestic industry 26. The submissions made by the applicants regarding domestic industry and standing are as follows: i. The present application has been filed by ATMA on behalf of Apollo Tyres Ltd, J.K Tyre Industries Ltd., and MRF Limited. The applicants' companies are not related to any exporters of the subject goods in the subject country or any importer of the subject goods in India. ii. There are other domestic producers of the subject goods in India such as Bridgestone India Private Limited, Continental India Ltd, Michelin India Private Limited and CEAT Limited. iii. The production by the applicants' companies constitutes more than the Indian production. The production of the applicants companies accordingly constitute a major proportion in the Indian production. iv. The applicants' companies have not imported the product under consideration from the subject country. Nor are they related to any importer or exporter of the product under consideration. V. The requirement of standing is not relevant for a sunset review investigation. In any case, the applicants' domestic industry meets the requirements of standing under Rule 6(3) of the CVD Rules. E.3 Examination by the Authority 27. Rule 2(b) of the CVD Rules defines domestic industry as: “domestic industry” means the domestic producers as a whole engaged in the manufacture of the like article or those whose collective output of the said article constitutes a major proportion of the total domestic production of that article, except when such producers are related to the exporters or importers of the alleged subsidised article, or like article from other countries or are themselves importers thereof, the term “domestic industry” may be interpreted as referring to the rest of the producers" 28. The present application has been filed by Automotive Tyre Manufacturer's Association on behalf of domestic producers of the product namely, Apollo Tyres Limited, J.K. Tyre Industries Limited and MRF Limited. 29. It is seen from the information on the record that the applicants account for more than 60% of the entire production in India. The applicants have not imported the subject goods from the subject country and that they are not related to any exporter of the subject goods in the subject country or importer of the subject goods in India. Accordingly, the Authority hold to determines that the applicants constitute domestic industry as defined under Rule 2(b) of the CVD Rules, and the application meets the requirements of standing under Rule 6(3). F. Confidentiality F.1 Submissions made by the other interested parties 30. Following submissions have been made by other interested parties with regard to confidentiality issues: i. The application filed by the petitioners have failed to provide nonconfidential summaries of the information claimed confidential without any reasonable justification thereby violating the Rules and Trade Notices. ii. The application filed by the petitioners have failed to comply with the requirements of the Trade Notice No. 10/2018 dated 7th September, 2018. F.2 Submissions made by the domestic industry 31. Following submissions have been made by the domestic industry with regard to confidentiality issues: i. The confidentiality claimed by exporters is so excessive that one cannot even gauge from NCV which subsidy schemes have been availed. ii. The responses filed by other interested parties are deficient and in violation of Trade Notice 10/2018 and Trade Notice 01/2013, thereby preventing the domestic industry from defending their rights. The exporters have claimed information in public domain confidential, showing excessive confidentiality claimed on no-basis. iii. The applicants have claimed such information as confidential, confidentiality of which has been permitted under the rules and as per consistent practice of the Authority. iv. The applicants have provided sufficient non confidential version of the application. No interested party has been able to point out any specific instance of information which has been claimed confidential and confidentiality of which is not justified under the rules. F.3 Examination of the Authority 32. With regard to confidentiality of information, Rule 8 of Anti-Subsidy Rules provides as follows: “Rule 8: Confidential information. (1) Notwithstanding anything contained in subrule (1), (2), (3) and (7) of rule 7, subrule (2) of rule 14, subrule (4) of rule 17 and subrule (3) of rule 19 copies of applications received under subrule- (1) of rule 6 or any other information provided to the designated authority on a confidential basis by any party in the course of investigation, shall, upon the designated authority being satisfied as to its confidentiality, be treated as such by it and no such information shall be disclosed to any other party without specific authorisation of the party providing such information. (2) The designated authority may require the parties providing information on confidential basis to furnish nonconfidential summary thereof in sufficient details to permit a reasonable understanding of the substance of the confidential information and if, in the opinion of a party providing such information, such information is not susceptible of summary, such party may submit to the designated authority a statement of reasons why summarization is not possible. (3) Notwithstanding anything contained in subrule (2), if the designated authority, is satisfied that the request for confidentiality is not warranted or the supplier of the information is either unwilling to make the information public or to authorise its disclosure in generalised or summary form, it may disregard such information." 33. A list of all the interested parties was uploaded on the DGTR's website along with the request therein to all to email the non-confidential version of their submissions to all other interested parties. 34. Information provided by the interested parties on confidential basis was examined with regard to sufficiency of the confidentiality claim. On being satisfied, the Authority has accepted the confidentiality claims, wherever warranted and such information has been considered confidential and not disclosed to the other interested parties. Wherever possible, parties providing information on confidential basis were directed to provide sufficient non- confidential version of the information filed on confidential basis. The Authority also notes that all interested parties have claimed their business-related sensitive information as confidential. G. Miscellaneous Submissions G.1 Submissions made by the other interested parties 35. The following submissions have been made by the domestic industry with regard to other issues: i. There is no need to continue countervailing duty as there are non-tariff barriers such as quality control order and import restrictions which are reducing imports. ii. Truck and bus radial tyres have been subjected to trade remedial measures in India numerous times. iii. Import data considered by the applicants is unreliable. iv. Countervailing duty should be adjusted for anti-dumping duty which is being assessed subject to provisional assessment order passed by Delhi High Court in its Order dated 9th January 2023 in Writ Petition filed by ATMA [WP (C) 225/2023. G.2 Submissions made by the domestic industry 36. The following submissions have been made by the domestic industry with regard to other issues: i. The unit of measurement used in the questionnaire responses by the respondents are in numbers (PCS) which fail to comply with the standard determined i.e., weight (MT) by the Authority in the original investigation. ii. Import duty restrictions and quality control order have no bearing on the case. The present case pertains to continuation of duty. On the other hand, import restrictions are imposed as per the discretion of the government and quality control orders are enforced to regulate quality of the products. iii. The question of adjustment against anti-dumping duty on subject goods does not arise as Ministry of Finance has not implemented Hon'ble Delhi Court's ad-interim direction as on date. G.3 Examination of the Authority 37. The Authority has considered the submissions made by the parties and determines as follows. 38. As regards subject goods being subjected to trade remedies numerous times, the Authority notes that there is no bar on the number of times redressal can be sought against unfair imports. The Rules require the Authority to determine whether cessation of countervailing duty is likely to lead to continuation or recurrence of subsidisation and injury to the domestic industry. The recommendation for extension of countervailing duty is made only when the requisite legal requirements are met. Further, it is seen that it is not only the Designated Authority that is taking trade remedial action against subject imports but also numerous other countries such as USA, Europe, Eurasian Economic Union, Egypt and South Africa. In fact, it is seen that the quantum of measures invoked by other authorities is much higher than the quantum of measures imposed by the Authority. 39. The import policy and certification requirements constitute statutory discretion vested in the government. It has no bearing on the scope of the present sunset review which is for the purpose of examining extension of countervailing duty. The government has only restricted the imports of the subject goods by way of licensing but has not banned imports. The licenses can be obtained after meeting the terms and conditions. 40. With regard to adjustment of countervailing duty with anti-dumping duty, the Authority has specified how anti- dumping duty and countervailing duty should be collected. The actual duty collection of anti-dumping duty is subject to the outcome of the writ petition pending before the Honourable Delhi Court. The Authority had determined the question of adjustment of countervailing duty and anti-dumping duties in its final findings in the original investigation dated 25th March 2019, in the event that anti-dumping duty and countervailing duty is levied simultaneously: “Having regard to the lesser duty rule followed by the Authority, the Authority recommends imposition of definitive countervailing duty equal to the lesser of margin of subsidy and margin of injury, from the date of notification to be issued in this regard by the Central Government, so as to remove the injury to the domestic industry. Since, product under consideration is already attracting anti-dumping duty from China PR, the amount of countervailing duty to be imposed is equivalent to the difference between the quantum of countervailing duty mentioned in Col No.7 below and antidumping duty payable, if any. If the countervailing duty is less than the anti-dumping duty payable, the differential amount would be in the negative and no countervailing duty shall be collected in such case.” 41. With regard to unreliability of import data submitted by the petitioners, the Authority has in any event relied on DGCI&S transaction-wise data for the purpose of its determinations regarding imports. H. Determination of Subsidy and Subsidy Margin 42. The application filed by the domestic industry provided adequate prima facie evidence of existence of countervailable subsidies in the subject country on the subject goods. Government of Peoples Republic China (“GoC”) was invited for consultations, which were held on 15th December, 2023. The present investigation was initiated on the basis of prima facie evidence. 43. The producers and exporters and GoC were advised to file response to questionnaire and were given adequate opportunity to provide verifiable information/evidence on the existence, degree, and effect of alleged subsidy program for a making an appropriate determination of existence and quantum of such subsidies. 44. Although the Government of China PR and the participating exporters filed response to the questionnaires, they failed to provide response in the form and manner prescribed by the Authority. GoC has provided information only in respect of participating exporters whereas in a countervailing duty investigation, industry wide information is mandatory to ascertain financial contribution, benefit and specificity. The program wise responses filed by GoC and exporters are also incomplete as response to each subsidy program and all applicable evidences have not been provided. Further, vital information regarding direct/indirect ownership/control of government in tyre companies has not been disclosed even though such information is available in public domain. Therefore, wherever the response filed by GoC and exporters have been found incomplete or inadequate, the Authority is constrained to rely on facts available on record, including the information provided by the domestic industry in its petition, determinations earlier made by the Authority, determinations made by other investigating authorities and information/evidence filed by the domestic industry during the course of the investigation. 45. As per the petition the Chinese producers/exporters of the subject goods have received countervailable subsidies under the following programs of various levels of governments and they have been classified under six broad categories: grants, tax and VAT incentives, preferential loans and lending/financing, export financing and export credit, provision of goods at less than adequate remuneration, and equity infusion. The various programs classified in these categories are listed below: I. Schemes previously countervailed in the Original Investigation 46. In the original investigation, the Authority had held that following schemes are countervailable: a. Programs in the Form of Grants i. Program no. 1: Fixed Asset Investment Subsidies ii. Program no. 2: Reimbursement of Anti-dumping and/or Countervailing Legal Expenses by the Local Governments iii. Program no. 3: Special fund for foreign economic and trade development iv. Program no. 4: Export Assistance Grant v. Program no. 5: Subsidies for Companies Located in the Hefei Economic and Technology Development Zone vi. Program no. 6: Anhui Province Subsidies for Foreign-Invested Enterprises vii. Program no. 7: Hefei Municipal Export Promotion Policies viii. Program no. 8: Various subsidy programs for enterprises located in Hangzhou Economic and Technology Development Area ix. Program no. 9: Funds for "Outward Expansion" of Industries in Guangdong Province x. Program no. 10: Research and Development Assistance Grant xi. Program no.11: Fund for Industrial Transformation and Upgrading / Grants related to technological upgrading, renovation or transformation xii. Program no. 12: Special funds for energy saving technology reform / promotion of circular economy/ incentive fund for transformation of energy-saving technology xiii. Program no. 13: Grants for purchase of equipments xiv. Program no. 14: Special funds for infrastructure construction xv. Program no. 15: Various Government grants- Received by producers/exporters of China PR/ Ad hoc grants provided by central, provincial and municipal/regional authorities xvi. Program no. 16: Grant for Bringing in Foreign Intellectuals xvii. Program no. 17: Grants for Employment Stabilization, Graduates Training and recruitment provided by provincial/prefectural/municipal government authorities xviii. Program no. 18: Postdoctoral researchers funding xix. Program no. 19: Grants for maintenance and operation of equipments xx. Program no. 20: Relocation Compensation provided by provincial/prefectural/municipal government authorities xxi. Program no. 21: Ad-hoc grants for implementing specialized projects/pilot projects provided by provincial/prefectural/municipal government authorities xxii. Program no. 22: Grants/Awards for Industrial Design xxiii. Program no. 23: Grants/Awards for Technological Innovation xxiv. Program no. 24: Talent introduction fund xxv. Program no. 25: Research report writing expenditure refund xxvi. Program no. 26: Service industry development fund xxvii. Program no. 27: Self-owned Brand Development Registration Fee refund xxviii. Program no. 28: Import Equipment interest subsidy xxix. Program no. 29: Export Rewards xxx. Program no. 30: Patent Creation and Support Fund xxxi. Program no. 31: Listing Fee Grant xxxii. Program no. 32: Subsidies for listed companies xxxiii. Program no. 33: Shandong Province Key Industry Technical Reform Project Loan Financial Discount Interest Fund xxxiv. Program no. 34: Nanhai New District Industrial Park Land Special Fund xxxv. Program no. 35: Grants for financing loans and interest xxxvi. Program no. 36: Special funds for land in Nanhai New District Industrial Park b. Programs in the form of Tax and Vat Incentives xxxvii. Program no. 37: Tax Policies for the deduction of research and development (R&D) expenses xxxviii. Program no. 38: Preferential tax policies/ Income Tax Reductions for companies that are recognized as high and new technology companies xxxix. Program no. 39: Tax credit concerning the purchase of special equipment c. Programs in the Form of Preferential Loans and Lending xl. Program no. 40: Government Policy Lending xli. Program no. 41: Preferential Loans to State Owned Enterprises xlii. Program no. 42: Discounted Loans for Export-Oriented Enterprises and Export Loan Interest Subsidies xliii. Program no. 43: Preferential loans and interest rates to the Tyre Industry d. Programs in the form of Export Financing and Export Credit xliv. Program no. 45: Export Seller's Credit xlv. Program no. 46: Export Buyer's Credit xlvi. Program no. 47: Other Export Financing from State-Owned Banks e. Programs in the Form of Provision of Goods and Services at Less Than Adequate Remuneration (LTAR) xlvii. Program no. 48: Provision of Electricity for Less Than Adequate Remuneration xlviii. Program no. 49: Land Use Rights at LTAR in Industrial and Other Special Economic Zone xlix. Program no. 50: Provision of Land to State Owned Enterprises at LTAR l. Program no. 51: Land Use rights at LTAR for Foreign Invested Enterprises li. Program no. 52: Land-Use Rights at LTAR in Economic Development Zones lii. Program no. 53: Provision of Carbon Black for Less Than Adequate Remuneration J. New Programs 47. The domestic industry has contended that there are more countervailable programs providing benefits, resulting in lower costs, thereby allowing Chinese producers to sell at a lower price. The list of such new programs is provided below: a. Programs in the Form of Grants i. Program no. 54: National Award for Green Factory ii. Program no. 55: Famous Brands of China recognized by central, provincial or municipal/regional authorities iii. Program no. 56: Compensation for land acquisition and demolition spending funds iv. Program no. 57: Funds for making investments in overseas subsidiaries v. Program no. 58: Department of Commerce exchange rate subsidies vi. Program no. 59: Grants for fixed asset investment for enterprises in Hubei vii. Program no. 60: Special Fund for High-quality Development for enterprises located in Hubei viii. Program no. 61: Road Transportation Subsidy ix. Program no. 62: Intellectual Property Awards provided by provincial/prefectural/municipal government authorities x. Program no. 63: Special funds for high-tech enterprises in Yantai Economic Development Zone xi. Program no. 64: Electricity subsidy xii. Program no. 65: Enterprise social security subsidy xiii. Program no. 66: Transformation and upgrading of key export industries xiv. Program no. 67: Incentive funds/ Awards for increasing production and efficiency of key enterprises xv. Program no. 68: Incentive funds for Expansion of production-oriented export enterprises xvi. Program no. 69: Industrial enterprise disaster relief funds b. Programs in the form of Tax and Vat Incentives xvii. Program no. 70: Export tax rebate/Tax Refund on Exports xviii. Program no. 71: Accelerated depreciation of fixed assets xix. Program no. 72: Tax incentives on urban land use tax for high tech enterprises xx. Program no. 73: Refund/Rebate/Remission of taxes and fees by central, provincial or municipal/regional governmental authorities xxi. Program no. 74: Import Tariff/Charges and VAT Relief for Imported Equipment xxii. Program no. 75: Import Tariff/Charges and VAT Relief for Imported Inputs c. Programs in the form of Equity Infusion xxiii. Program no. 76: Grant of Shares in Prometeon Tyre Group S.r.l. to Aeolus Tyres by ChemChina xxiv. Program no. 77: Preferential Financing under One Belt One Road Initiative for Companies making Outward Investments xxv. Program no. 78: Debt for Equity Swaps d. Programs in the Form of Provision of Goods and Services at Less Than Adequate Remuneration (LTAR) xxvi. Program no. 79: Provision of Nylon Tyre Cord Fabric for Less Than Adequate Remuneration xxvii. Program no. 80: Provision of Synthetic Rubber for Less Than Adequate Remuneration xxviii. Program no. 81: Provision of Natural Rubber for Less than Adequate Remuneration e. Programs in the Form of Preferential Financing xxix. Program no. 82: Provision of Loan Guarantee/Credit Loan Guarantee/Export Credit Guarantee by GOC/ State owned Banks 48. Principle of judicial economy allows the Authority to refrain from undertaking detailed investigation in respect of those program wherein the Authority is not required to quantify benefits. The Authority has examined whether countervailable schemes as determined during the original investigation continue, and whether there is evidence of continued benefit being received under the said schemes. The present investigation is a sunset review investigation, and the objective of the investigation is to ascertain whether the Chinese producers continue to benefit from countervailable subsidies. However, the GoC and the exporters have filed incomplete and inadequate responses. The Authority has considered it unnecessary to quantify benefits under these schemes that were earlier investigated and found countervailable. However, the Authority has examined hereinbelow whether the subsidy programs countervailed at the time of original investigations continue to give countervailable benefits. 49. The domestic industry has alleged existence of a number of new schemes. These were not brought before the Authority at the time of the original investigations. The domestic industry contended that the Chinese producers have received countervailable benefits in these schemes as well. However, the domestic industry has not provided any information and evidence for quantification of benefits in these schemes. Barring two Chinese producers, none of the Chinese producers participated in the present investigation. The responding exporters have stated that they have not supplied any PUC during present POI. Even otherwise, the questionnaire response filed by the responding exporters are incomplete. Since, the domestic industry has not provided information and evidence for quantification of benefit, the present investigation is a sunset review investigation, and the domestic industry itself has not claimed increased countervailing duty margin, the Authority considers that it is not necessary to examine countervailability of these programs. Accordingly, the new schemes brought on record by the domestic industry have not been examined. K. Examination of Subsidy Programs K.1 Submissions made by the other interested parties 50. The following submissions have been made by the other interested parties with regard to subsidy and subsidy margins: i. The petitioners failed to provide sufficient evidence to show existence of the program or how the program relates to tyre producers. ii. The participating respondents are not located in the geographical region in respect of which subsidy program is applicable. iii. The petitioners fail to provide the accounting records, vouchers, or any other evidence to prove that the companies under investigation have actually received the subsidy benefits associated with the program. iv. Subsidy schemes are not specific. v. Concept of non-market economy does not exist in countervailing duty laws in India. vi. External benchmarks for less than adequate remuneration analysis is not consistent with Indian laws. vii. Chinese commercial banks and state-owned enterprises are not "public bodies." State ownership is not the sole criterion to determine if an entity is a public body. viii. Individual duty rates as determined in the original investigation should be recommended for participating exporters. ix. GoC and the participating exporters have filed complete questionnaire response as prescribed by the Authority. x. GoC has not provided information in respect of non-participating exporters as it does not have access to their information. It has responded to the best of its ability. K.2 Submissions made by the domestic industry 51. The following submissions have been made by the domestic industry with regard to subsidy and subsidy margins: i. Chinese laws and regulations, various government reports, screenshots of government websites, WTO reports, media reports and independent studies and analysis undertaken by reputed organisations such as OECD, detailed findings of other investigating agencies in their anti-subsidy investigations corroborated with annual reports of major tyre producers, all show sufficient evidence for financial contribution, benefit, and specificity. ii. In the original investigation, the Authority found countervailability of programs on the basis of geographic specific subsidies availed by Giti Tyre Anhui Co. Ltd. and Guangzhou Pearl River. These exporters are not participating in the present SSR, but this does not change countervailability of subsidy schemes iii. The Annual Reports of major tyre producers itself show availment of subsidies. The onus is on the participating exporters to show their accounting records or vouchers to show that they have not availed subsidies. iv. GOC has failed to provide adequate response to counter de jure and de facto specificity of the alleged subsidy programs. v. China is considered as a “non-market economy" by almost all investigating authorities precisely because of rampant price distortions prevailing in all industries across the board. Price distortions in China is documented by European Commission in its Working Document "Significant Distortions in the Economy of the People's Republic of China for the Purposes of Trade Defence Investigations. vi. WTO allows investigating authorities to reject domestic prices as a benchmark price to address 'price distortions' as held by WTO Panel in US – Definitive Anti-Dumping and Countervailing Duties on Certain Products from China. DGTR has also considered external benchmarks in Anti-subsidy investigation concerning imports of “Fiberboards” originating in or exported from Indonesia, Malaysia, Thailand, Vietnam, and Sri Lanka (Case No. CVD 6/2019). vii. Even when the state-ownership is not considered as the sole criterion to determine whether state owned banks in China are public bodies, the investigating authorities including India, USA and Europe have consistently held that Chinese banks possess, exercise and vested with governmental authority. Therefore, they are public bodies as per CVD law. viii. The domestic industry is requesting for continuation of imposition of residual duty on all exporters due to their failure to cooperate in the present investigation. ix. GoC has suppressed information regarding direct and indirect ownership/control of the government in tyre companies in China. Such information is available in the public domain. However, neither GoC nor participating exporters provided this information in their response. K.3 Examination of Subsidies A. Grants: programs claimed to be countervailed in original investigation: Program no. 1 to 36 K.4 Submissions made by the other interested parties 52. Following submissions were made by GoC and participating exporters regarding subsidy programs in the nature of grants: i. In respect to program no. 1 to 36 and 54 to 69 the GoC has stated that participating exporters have not applied for some of the programs, the domestic industry has not provided sufficient evidence for some of the programs, some of the programs are not specific and some of the programs are not applicable to the participating exporters. Therefore, the Standard Questions Annexure and Grant Annexure are not applicable. ii. As per the GoC the subsidy program alleged as program no. 2 does not exist as a subsidy scheme. Further, Program no. 13 is not specific. iii. Zhongce Rubber Group has availed grants under program no. 8, 12, 17, 18, 20, 23, 24, 29, 30, 31 and 62. The document relied upon by the domestic industry to claim that Zhongce has failed to provide complete information regarding grants is share prospectus and not annual report. This document is a consolidated report which lists subsidies received by all subsidiaries of Zhongce Rubber Group. These subsidiaries are not producers of the PUC and not participating in the investigation. iv. Shandong Yinbao Tyre Group Co., Ltd has availed grants under program no. 17, 23 and 62. K.5 Submissions made by the domestic industry 53. Following submissions were made by the domestic industry regarding subsidy programs in the nature of grants: i. In the original investigation, the Authority had countervailed subsidy programs in the nature of grants under program no. 1 to 36. Neither the participating exporters nor the GoC have submitted any evidence to show that the subsidy programs are not continuing. ii. GoC is required to respond to program-wise questionnaire in respect of all exporters and not just participating exporters. iii. Neither GoC nor participating exporters have provided response to Grants Annexure. iv. None of the participating exporters or GoC have provided response in respect of new programs in the nature of grants (Program no. 54 to 69). The Annual Report of Zhongce Rubber in fact specifies receipt of numerous grants which Zhongce has failed to disclose in its response. K.6 Examination of the Authority 54. The Authority has examined program no. 1 to 36 which domestic industry had claimed to be countervailable on the basis of Authority's final findings in the original investigation. Barring program no. 15, 35 and 36, the Authority determines that all programs from 1 to 36 were held to be countervailable by the Authority in the original investigation. Program no. 15, 35 and 36 have been removed as they are general or duplicate programs which have already been covered by other programs. 55. The GoC and the participating exporters have provided incomplete and inadequate response in respect of these subsidy programs. No substantive evidence has been provided to support the claim that these grants are not countervailable. Further no evidence has been provided to support the claim that benefits received under these schemes have discontinued. 56. In any event, the benefit for a non-recurring subsidy program related to capital assets continues for the entire average useful life of the assets which is typically taken as 10 years as per DGTR practice in countervailing duty investigations. Therefore, for non-recurring subsidy programs related to capital assets, the benefit would be deemed to continue in the present sunset review, considering that the life of the assets is not completed. 57. Even when there are two Chinese producers who have participated in the present investigations, these producers have claimed that they have not exported any PUC to India during the present POI. Thus, the Authority has not examined continuation of countervailable benefits for individual participating producers. The Authority has examined whether the Chinese producers as such continue to receive countervailable benefits under these programs. 58. In respect of program no. 1, 3, 4, 9, 11, 14, 15, 16, 19, 21, 22, 25, 26, 27, 28, 32, 36, 54, 56, 57, 58, 59, 60, 61, 63, 64, 65, 66, 67, 68, 69 the GoC has merely submitted that participating exporters have not applied for these programs. The Authority notes that program no. 1, 3, 4, 9, 11, 14, 15, 16, 19, 21, 22, 25, 26, 27, 28, 32, 36 are in the nature of grants. Since these are in the nature of grants, the Authority is required to consider these over the average useful life (AUL) of the company. It is noted that GoC has not provided any documentary evidence substantiating its claim that the respondents have not availed any grant during the AUL and the POI. 59. Analysis of annual report of the participating producers clearly show receipt of grants. It is noted that the company has received significant amount of grant during the present period. Thus, receipt of grant even during the current period is established even by the questionnaire response filed by the participating producers itself. In addition, the domestic industry has also filed annual reports of other tyre producers Triangle Tire Co Ltd, Shandong Linglong Tire Co. Ltd., Aeolus Tire Co Ltd., Wanda Group Co. Ltd. and Giti Tire Co. Ltd. for the calendar year 2022 as evidence of grants. These annual reports also show receipt of significant amount of grants during the current period. 60. The Authority notes that program no. 54, 56, 57, 58, 59, 60, 61, 63, 64, 65, 66, 67, 68, 69 are new programs identified by the petitioners. As stated before, the Authority has considered it appropriate not to examine new programs. Therefore, countervailability of these has not been examined. 61. The two Chinese participating producers have claimed that they have not exported any PUC to India during the present POI. Countervailability requires examination of financial contribution, benefit, and specificity. Financial contribution requires examination of legal texts that govern subsidy programs. Benefit analysis involves examination of whether the recipient is more advantageous than others in a market or if a recipient has received financial contribution which is not based on commercial considerations. Specificity requires examination of eligibility criteria of subsidy programs in order to determine if a subsidy program is enterprise specific or industry specific or geographically specific. Further, specificity analysis is not limited to legal text alone (de jure subsidy). The Authority is also required to examine grant of subsidy in fact (de facto subsidy), which involves an examination of whether a subsidy has been granted to limited number of enterprises (even though the legal text may not mention such specificity criteria) or the subsidy is predominantly used by certain enterprises or disproportionately large sum of subsidy is granted to certain enterprises. This analysis can certainly not be done on the basis of information submitted for participating exporters alone. GoC has not responded to the questionnaire in the prescribed format by avoiding to provide industry wide information in respect of all enterprises involved in production and sale of the product under consideration. 62. In respect of program no. 13, “Grants for Purchase of Equipment”, GoC claimed that it is not specific. During the original investigation, the exporters themselves reported that they have received such grants. GoC has not submitted any evidence to show that these grants are not enterprise or industry specific. The Authority considers that the benefit under this program became available throughout the life of the equipment so bought. Availment of this benefit was admitted by the exporters in the original investigation. Therefore, the Authority continues to hold program no. 12 as countervailable. 63. The Authority examined the document regarding Zhongce Rubber submitted by the petitioners to claim that Zhongce Rubber has not disclosed grant programs. The document is titled as "Prospectus for Initial Public Offering of shares and listing on the main board" of Zhongce Rubber Group Co., Ltd. The document identifies numerous subsidy programs in the nature of grants which are evidently not disclosed by Zhongce in its response. In this regard, Zhongce has submitted that the share prospectus is a "consolidated report" of Zhongce Rubber Group as a whole. It is not required to disclose subsidies received by all subsidiaries. The Authority has examined that Zhongce Rubber has following wholly owned subsidiaries: i. Hangzhou Chaoyang Rubber Co., Ltd. ii. Zhongce Rubber (Jiande) Co., Ltd. iii. Hangzhou Zhongce Qingquan Industrial Co., Ltd. iv. Hangzhou Haichao Rubber Co., Ltd. v. Zhongce Rubber (Anji) Co., Ltd. vi. Zhongce Rubber (Tianjin) Co., Ltd. 64. Out of these subsidiaries, it is evident from publicly available information that Hangzhou Zhongce Qingquan Industrial Co., Ltd.¹ and Zhongce Rubber (Tianjin) Co., Ltd. produce the PUC. Out of these two only Zhongce Rubber (Tianjin) Co., Ltd. has filed response. Therefore, it is evident from the consolidated report and absence of response by Hangzhou Zhongce Qingquan Industrial Co., Ltd. that Zhongce Rubber has not disclosed all subsidy programs availed by its subsidiaries that produce the PUC. B. Tax and VAT incentives: Program no. 37 to 39 (subsidy programs investigated in the original investigation) i. Program no. 37 1 https://www.tirereview.com/hangzhou-zhongce-sets-prudent-growth-course/ K.7 Submissions made by other interested parties i. The GOC and participating exporters have stated that the programs in the nature of Tax and VAT incentives are not specific. K.8 Submissions made by the domestic industry 65. The domestic industry made the following submissions- i. With regard to subsidy programs in the nature of Tax and VAT incentives the domestic industry has stated that, in the original investigation, the Authority had countervailed subsidy programs in the nature of tax incentives under program no. 37 to 39. ii. Neither the participating exporters nor the GoC have submitted any evidence to show that the subsidy programs are not continuing to confer benefit. K.9 Examination of the Authority 66. In respect of Program no. 37, "Tax Policies for the deduction of research and development (R&D) expenses", the Authority examined countervailability of this program as program no. 27 in the original investigation. The relevant extracts of the findings are provided below: "183.The Authority notes that the program was governed under Article 30.1 of the Corporate Income Tax Law of the PRC and Article 95 of the Regulations on the Implementation of Enterprise Income Tax Law of the PRC. Further, the SAT issued Notice on Issuing the Administrative Measures for the Pre-tax Deduction of Enterprise Research and Development Expenses (for Trial Implementation) (Guo Shui Fa (2008) No. 116) to clarify R&D expense allowed to be deducted on a weighted basis. 184.The above instrument also stipulates that where the R&D expenses actually incurred by an enterprise have not been included in the current loss and profit as intangible assets, 50% of the amount of R&D expenses actually incurred during year shall be deducted from the amount of taxable income in addition to the deduction based on actual expenses. Where any intangible assets are formed, 150% of the costs of the intangible assets shall be amortized before tax payment. 185.The Authority notes that Guo Shui Fa (2008) No. 116 was replaced with Notice of the Ministry of Finance and the State Administration of Taxation on Issues concerning the Policies for the Weighted Pre-tax Deduction of Research and Development Costs (Cai Shui (2013) No. 70) dated January 1, 2013 and then further replaced with Notice of the Ministry of Finance, the State Administration of Taxation and the Ministry of Science and Technology on Improving the Policies for the Weighted Pre-tax Deduction of Research and Development Expenses (Cai Shui (2015) No. 119) dated January 1, 2016. The same is still in effect. 186.The Authority notes that this program has been earlier examined by some other investigating Authorities in the past, which establishes its existence. For example, countervailability of this program has been established by the EU authorities in Organic Coated Steel Products. 187.Zhongce Rubber Group Co, Ltd, one of the responding exporters from China PR has submitted in its questionnaire response that it availed this subsidy and has provided information with regard to the amount of subsidy during the POI. 188.Program provides for a financial contribution in the form of revenue foregone which is otherwise due and a benefit is thereby conferred. Subsidy is also specific because it is limited to enterprise which are engaged in research and developmental activities. The fact that Zhongce Rubber benefited from the program shows that program was in fact used by the tyre producers in China PR that exported the subject product to India during the POI. Therefore, Authority holds that countervailing duty should be imposed against this program." 67. Zhongce Rubber Group Co, Ltd, and Shangdong Yinbai Tyre Group Co. Ltd. participating exporters from China PR have submitted in their questionnaire response that they have availed this subsidy and have provided information with regard to the amount of subsidy during the POI. 68. GOC in its response has claimed that the program is not countervailable, as it is not specific. GoC claimed that this program is available to all enterprises, regardless of whether they are classified as high and new technology enterprises. However, in the original investigation the Authority had determined that the program is specific, because it is limited to enterprise which are engaged in research and developmental activities. The GoC had not contested this determination. The Authority notes that the continuation of the program has not been disputed by the GoC. In fact, the GoC has admitted continuation of the program. Therefore, the Authority holds that this program continues to grant countervailable benefit. ii. Examination of Program no. 38 69. In respect of Program no. 38, “Preferential tax policies/Income Tax Reductions for companies that are recognized as high and new technology companies”, the Authority examined countervailability of this program as program no. 31 in the original investigation. The relevant extracts of the findings are provided below: “216.The Authority notes that this program has been earlier examined by some other investigating Authorities in the past and existence and countervailability of this program has been established. For example, (a) by the EU authorities in organic coated steel products as well as coated fine paper. 217.Aeolus Tyre Co, Ltd and Triangle Tyre Co, Ltd, two of the responding exporters from China PR who have submitted questionnaire response and have stated that they availed this benefit and have provided information with regard to the amount of subsidy received by them during the POI. 218.Program provides for financial contribution in the form of revenue foregone and benefit is thereby conferred. Program is also specific because it is limited to certain enterprises. The fact that Aeolus Tyre Co. Ltd. and Triangle Tyre Co. Ltd., benefited from the program shows that program was in fact used by the tyre producers in China PR that exported the subject product to India during the POI. Therefore, the Authority holds that countervailing duty should be imposed against this program." 70. Aeolus Tyre Co. Ltd. and Triangle Tyre Co. Ltd. who availed this program during the original investigation have not participated in the present sunset review. The participating exporters have not availed this program. However, as mentioned above, countervailability of a program is not determined by participating exporters alone. 71. GOC has claimed that the program is not specific as it is applicable to all high and new technology enterprises, and certification of high and new technology enterprise is applicable to all legal person enterprises within China without any bias as to enterprise type, industrial sector, or geographical location. However, GOC has not submitted any evidence to substantiate this claim. The Authority has also previously found this program to be countervailable in Hot Rolled Cold Rolled Steel (2017) after examining in detail the specificity of the eligibility criteria of High and New Technology Enterprises: “310. Under these regulations enterprises with ‘Advanced and New-Tech enterprises Certificates' and those located in specified regions or zones are eligible for reduction of the normal tax rate of 25% to the preferential rate of 15%." 72. The GoC has not provided any document to show that the conclusion drawn by the Authority in the previous determination no longer holds true. Further, as per the regulation quoted above, the reduction in normal tax rate is available only to enterprises with 'advanced and new-tech enterprises certificates' and to those located in specified regions. This itself establishes that the program is specific as it is not available to all enterprises. Therefore, the Authority holds that this program continues to grant countervailable benefit. iii. Examination of Program no. 39 73. In respect of program no. 39, “Tax credit concerning the purchase of special equipment”, the Authority examined countervailability of this program as program no. 39 in the original investigation. The relevant extracts of the findings are provided below: “225.The Authority notes that the program was governed under Article 34 of the Enterprise Income Tax Law of the PRC and Article 100 of the Regulations on the Implementation of Enterprise Income Tax Law of the PRC. Further, the Ministry of Finance, the State Administration of Taxation, the National Development and Reform Commission and Other Departments issued the Catalogues of the Special Equipment for Energy and Water Conservation and Environmental Protection Eligible for Enterprise Income Tax Preferences (Cai Shui (2008) No. 115), which was replaced by 2017 Version (Cai Shui (2017) No. 71). 226.The Authority notes that this program has been earlier examined by some other investigating Authorities in the past and existence and countervailability of this program has been established. For example, by the EU authorities in organic coated steel products. 227.Shandong Yongfeng Tire Co. Ltd, one of the responding exporters from China PR who has submitted questionnaire response has stated that it availed this benefit and has provided information with regard to the amount of subsidy received by the company during the POI. 228.The program provides for financial contribution in the form of revenue foregone and benefit is thereby conferred on the recipient. The program is also specific because it is limited to certain enterprises that purchases special equipment. The fact that Shandong Yongfeng benefited from the program shows that program was in fact used by the tyre producers in China PR that exported the subject product to India during the POI. Therefore, the Authority holds that countervailing duty should be imposed against this program." 74. Shandong Yongfeng who availed this program during the original investigation has not participated in the present sunset review. The participating exporters have not availed this program. However, as mentioned above, countervailability of a program is not determined by participating exporters alone. 75. GOC has claimed that this program is not specific, as specificity is only limited to enterprises that purchase special equipment without regard to enterprise type, industrial sector, or geographical location. However, the very fact that the program is specific to enterprises that purchase special equipment itself shows enterprise specificity as held by investigating authorities including DGTR in past cases. In the original investigation the Authority had determined that the program is specific. The Authority notes that the continuation of the program has not been disputed by the GoC. In fact, the GoC has admitted continuation of the program. Therefore, the Authority holds that this program continues to grant countervailable benefit. C. Preferential loans and lending/financing (programs that were investigated at the time of original investigation): Program no. 40 to 47 Program no. 40: Government Policy Lending Program no. 41: Preferential Loans to State Owned Enterprises Program no. 42: Discounted Loans for Export-Oriented Enterprises and Export Loan Interest Subsidies Program no. 43: Preferential loans and interest rates to the Tyre Industry Program no. 44: Export Credit Insurance Subsidy Program no. 45: Export Seller's Credit Program no. 46: Export Buyer's Credit Program no. 47: Other Export Financing from State-Owned Banks K.10 Submissions made by the other interested parties 76. Following submissions were made by other interested parties regarding preferential loans and lending: i. Bank of China de-regulated interest rates as per notice of the People's Bank of China on adjusting the deposit and loan interest rates of financial institutions. ii. Chinese commercial banks and state-owned enterprises are not "public bodies” as per Notice of the China Banking Regulatory Commission and Article 4 of China's Commercial Bank Law. iii. Evidences in the petition are irrelevant and insufficient to support the allegation. iv. State ownership is not the sole criterion to determine if an entity is a public body. v. Specific subsidy does not exist in this program. vi. Exporter Seller's Credit program does not constitute financial contribution. K.11 Submissions made by the domestic industry 77. Following submissions were made by the domestic industry regarding preferential loans and lending: i. The Authority had held these programs to be countervailable in the original investigation. No evidence has been provided that the benefit of such subsidised loans has discontinued. ii. GOC and the participating exporters have filed incomplete and inadequate response. No response has been filed in respect of loans annexure to show that lending rates are at market rates. iii. Article 34 of the Law on Commercial Bank law, which applies to all financial institutions operating in China, provides that 'Commercial banks shall conduct their business of lending in accordance with the needs of the national economic and social development and under the guidance of the industrial policies of the State'. Although Article 4 of the Bank Law states that 'Commercial banks shall, pursuant to law, conduct business operations without interference from any unit or individual. Commercial banks shall independently assume civil liability with their entire legal person property', US Department of Commerce and European Commission has determined that Article 4 of the Bank law is applied subject to Article 34 of the Bank law, i.e. where the State establishes a public policy the banks implement it and follow State instructions. K.12 Examination by the Authority 78. In the original investigation, the Authority examined countervailability of the above programs in the nature of preferential loans and lending as program no. 52 to 57. The relevant extracts of the findings are provided below: "334. During the course of investigation, the Authority noted that certain participating exporters from China PR have received benefit in the form of preferential lending from state owned banks. Authority has determined that such preferential lending has resulted in financial contribution in the form of direct transfer of funds. Authority has determined countervailing duty against such preferential lending by comparing the interest rate charged by the state-owned bank from the exporter receiving loan with the commercial benchmark interest rate prescribed for the long term and short-term borrowing by the People's Bank of China (Central Bank of China). Benefit was calculated based on the difference between these two rates. The Authority has not separately identified whether the loan granted by state owned banks were for exports or for other reasons." 79. GOC has contended that Chinese state-owned banks are not public bodies. It has contended that state ownership is not the sole criterion for determining if an entity is a public body. 80. The Authority has examined prevailing position in law regarding public bodies as per WTO jurisprudence. In United States definitive anti-dumping and countervailing duties on certain products from China, the Appellate Body established the legal standard for determination of public bodies which is consistently followed by all investigating authorities. It determined that public body within the meaning of Article 1.1(a)(1) of the SCM Agreement must be an entity that possesses, exercises or is vested with governmental authority. The Appellate Body described several types of evidence or indicators that an administering authority can consider in determining whether an entity "possesses, exercises or is vested with governmental authority." First, one can look at legal instruments. Second, one can look at the actions of the entity. Third, one can look at whether the government exercises “meaningful control" over the entity. 81. Investigating authorities, including USA and Europe, have consistently found that Chinese commercial banks possess, exercise, and are vested with governmental authority. By way of an example, relevant extracts from European Commission's Final Finding in respect of Countervailing Duty imports of certain pneumatic tyres, new or retreated, of rubber, of a kind used for buses or lorries, with a load index exceeding (dated 9th November 2018) is provided below. The detailed findings of the European Commission would show how Chinese banks exercise government functions. "At the general level, Article 34 of the Bank law, which applies to all financial institutions operating in China, provides that ‘Commercial banks shall conduct their business of lending in accordance with the needs of the national economic and social development and under the guidance of the industrial policies of the State'. Although Article 4 of the Bank Law states that 'Commercial banks shall, pursuant to law, conduct business operations without interference from any unit or individual. Commercial banks shall independently assume civil liability with their entire legal person property', the investigation showed that Article 4 of the Bank law is applied subject to Article 34 of the Bank law, i.e. where the State establishes a public policy the banks implement it and follow State instructions. In addition, Article 15 of the General Rules on Loans provides: ‘In accordance with the State's policy, relevant departments may subsidize interests on loans, with a view to promoting the growth of certain industries and economic development in some areas. On that basis, the Commission concluded that the GOC has created a normative framework that had to be adhered to by the managers and supervisors appointed by the GOC and accountable to the GOC. Therefore, the GOC relied on the normative framework in order to exercise control in a meaningful way over the conduct of the three cooperating state-owned banks whenever those were providing loans to the tyres industry...The Commission also sought concrete proof of the exercise of control in a meaningful way on the basis of concrete loans...The verification visits revealed that with the sole exception of certain loans in foreign currency, loans were provided to the four groups of sampled exporting producers at interest rates close to the People's Bank of China (‘PBOC') benchmark interest rates, regardless of the companies' financial and credit risk situation. Hence, the loans were provided below market rates when compared to the rate corresponding to the risk profile of the four sampled exporting producers. In addition, the sampled companies had received revolving loans, which allow them to immediately replace the capital repaid on loans at the maturity date by fresh capital from new loans. In the case of two of the sampled groups of companies, payment schedules were restructured or debt was forgiven because of financial difficulties...The Commission also found that loans which should have been reported by the banks as‘not normal' loans had not always been indicated as such in the national central credit register by the three cooperating state-owned banks. The obligation to report such 'not normal loans' exists in particular when loans had been restructured, when the debtor defaulted on its payments, or when revolving loans had been issued. Such occurrences were found for all four groups of sampled exporting producers. According to the CBRC's 'Guidelines on risk-based loan classification', all of these instances should have been included in the central credit register. This lack of reporting by the financial institutions leads to a distorted picture of the company's credit situation in the central credit register, as the register does not show the real creditworthiness of the company. As a result, even if a financial institution were to apply a market-based risk assessment, it would have done so based on inaccurate information. The Commission therefore concluded that the GOC has exercised meaningful control over the conduct of the three cooperating state-owned banks with respect to their lending policies and assessment of risk concerning the tyres industry." 82. Consistent with approach followed by majority of investigating authorities, the Designated Authority has also considered Chinese banks as public bodies in all of its countervailing duty investigations where China has been a subject country. 83. In respect of program no. 44, “Export Credit Insurance Subsidy”, the Authority examined countervailability of this program as program no. 58 in the original investigation. The relevant extracts are provided as follows: “342. The Authority also notes that some of the participating producers have reported benefit received in the form of export credit insurance premium subsidy as grants (other than the benefit under this program) and the same has already been countervailed by the Authority." 84. As benefit in the form of export credit insurance premium subsidy have already been countervailed in the form of grants, this subsidy is not being examined separately to avoid duplicity. 85. As mentioned above, programs were already examined in the original investigation, and the Authority has no different view on the programs from the views made in the original investigation. D. Provision of goods at less than adequate remuneration: Program no.48 to 53 Program no. 48: Provision of Electricity for Less Than Adequate Remuneration Program no. 49: Land Use Rights at LTAR in Industrial and Other Special Economic Zone Program no. 50: Provision of Land to State Owned Enterprises at LTAR Program no. 51: Land Use rights at LTAR for Foreign Invested Enterprises Program no. 52: Land-Use Rights at LTAR in Economic Development Zones Program no. 53: Provision of Carbon Black for Less Than Adequate Remuneration K.13 Submissions made by the other interested parties 86. Following submissions were made by other interested parties regarding above schemes relating to provision of goods at less than adequate remuneration: i. Electricity prices in China PR are market determined as per notice on Further Deepening the Market- Oriented Reform of On-Grid Electricity Price for Coal-fired Power Generation (FGJG (2021) and notices from Provincial-Level Pricing Authorities about the Elimination of the Industrial and Commercial Electricity Sale Catalogue. ii. According to the provisions on the Assignment of State-owned Construction Land Use Right through Bid Invitation Auction and Quotation, provision of land use rights in China is not specific. iii. External benchmarks for LTAR schemes ought to be rejected as the concept of non-market economy in countervailing duty laws of India does not exist. iv. The GOC does not interfere in or influence pricing in this market. Prices fluctuate in accordance with market dynamics. K.14 Submissions made by the domestic industry 87. Following submissions were made by the domestic industry regarding above schemes relating to provision of goods at less than adequate remuneration. i. Program no. 48 to 53 were held to be countervailable by the Authority in the original investigation. No substantive evidence has been filed to rebut countervailability of the programs. ii. GOC and the participating exporters have filed incomplete and inadequate response. No response has been filed in respect of provision of goods/services annexure to show that goods received from GOC, provisional government, local government, or state-owned enterprises are at market rates. iii. It is for the Authority to determine the "adequacy of remuneration" and not for the exporter to pre-judge and assume that all goods and services provided to the company are at par with market prices. iv. The electricity market in China is characterised by an important participation of SOEs in the various stages of the supply chain. There is a significant difference between the normal power tariff and actual tariff paid by the said producers and the difference amounts to subsidy provided by the State. The program provides financial support in the form of provision of electricity at subsidized rates, to enterprises, classified as encouraged industries. v. As per Land administration Law of PRC, 2004 land is provided to certain industries at concessional rates. High and new technologically advanced enterprise and certain other categories of industries also receive exemption from administrative charges and provision of land use rights for less than adequate remuneration. vi. CCP exerts significant control over economic activities in China. GOC exercises meaningful control over State owned enterprises and uses them to effectuate its goals of upholding the socialist market economy, allocating resources, and maintaining the predominant role of the state sector. vii. State owned enterprises in China accounts for approximately 26.44% of the total output of carbon black in China. viii. State-owned enterprises supply carbon black to tyre exporters in China. The price of input supplied is typically much below the benchmark rates i.e. prices prevailing in market economies. ix. The fact that input suppliers are ostensibly privately or foreign-owned companies is not dispositive for determining whether such suppliers are “authorities” because of possible GOC or CCP involvement in these companies. x. GoC must establish that input suppliers are independent from government control. xi. SOEs represents 31.43% of the domestic output of synthetic rubber in China. xii. Chinese Government continues to hold significant interference in the operations (as is evident from the treatment of non-market economy). For the purpose of less than adequate remuneration, any in-country benchmark would not be an appropriate