Australia notes that the extent to which duties and services taxes are not able to be refunded could be construed as a tax on exports, which would discourage exports and suppress domestic prices of the relevant goods.
Does India consider that the reduction or elimination of drawbacks provides a subsidy to further manufactured goods that use the relevant goods as an input (e.g. jeans made from the cotton yarn)?
Reply: Under the WTO rules, a subsidy shall be deemed to exist if there is a financial contribution by a government or any public body within the territory of a Member or there is any form of income or price support and a benefit is conferred. The reduction or elimination of duty drawback on a particular item does not constitute a subsidy.
