Preliminary findings explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Rules 14 to 18 cover the middle of a countervailing duty case. The designated authority may record preliminary findings (rule 14); the Central Government may impose a provisional duty (rule 15); the investigation must end if specified thresholds are met (rule 16); an undertaking by the exporting government or exporters can suspend or terminate it (rule 17); and parties must be told the essential facts before the final findings (rule 18).
This article reads the rules as amended up to Notification No. 51/2024-Customs (N.T.) dated 23 July 2024 (rule 23A, in force 24 July 2024). Later notifications should be checked before you rely on the current text.
Provisional duty may follow a preliminary finding, but not before sixty days from the initiation notice and for not more than four months. The investigation must be terminated if the subsidy is less than one per cent ad valorem (two per cent for a developing country product), or imports are negligible. An undertaking can come from the exporting government or from exporters, but an exporter's undertaking needs the consent of the exporting country.
Rule 14: preliminary findings
In appropriate cases, the authority records a preliminary finding on the existence and nature of a subsidy and, for specified countries, on injury, with a sufficiently detailed explanation referring to matters of fact and law behind accepted or rejected arguments. The finding contains: supplier names (or supplying countries); a description of the product sufficient for customs purposes; the amount of subsidy established and the basis for its existence; considerations relevant to injury; and the main reasons. A public notice records the preliminary findings (14(2)).
Rule 15: provisional duty
The Central Government may, in accordance with section 9(2) of the Customs Tariff Act, 1975, impose provisional duty on the basis of the preliminary findings. Two provisos set limits.
| Limit | As printed |
|---|---|
| Earliest date | Not before the expiry of sixty days from the date of issue of the public notice on the decision to initiate |
| Maximum period | The duty remains in force for a period not exceeding four months |
The anti-dumping equivalent allows six months, extendable to nine, so do not carry the anti-dumping period across; see our article on Rules 12 to 16 of the anti-dumping rules.
Rule 16: termination
The authority must terminate by public notice, immediately, if:
- (a) the domestic industry at whose instance the investigation began asks in writing;
- (b) it is satisfied there is no sufficient evidence of subsidisation or, where applicable, injury;
- (c) the subsidy is less than one per cent ad valorem, or, for a product originating in a developing country, less than two per cent; or
- (d) the volume of subsidised imports, actual or potential, or injury where applicable, is negligible; or, for a product from a developing country, the volume of subsidised imports represents less than four per cent of total imports of the like product into India, unless imports from developing countries each below four per cent collectively account for more than nine per cent of total imports of the like product.
An example: an investigation covers fabric from a developing country. At the end of the period of investigation the authority finds the subsidy to be below two per cent. Under rule 16(1)(c) the investigation ends. If instead the subsidy is above that level, but imports from the country represent less than four per cent of total imports, rule 16(1)(d) applies unless the collective nine per cent test is met.
Rule 17: undertakings
Who can offer one (17(1))
The authority may suspend or terminate an investigation if:
- (a)(i) the government of the exporting country furnishes an undertaking that it will withdraw the subsidy;
- (a)(ii) in the case of specified countries, that government undertakes to limit the quantum of subsidy within reasonable limits, or to take other suitable measures to neutralise its effect, and the authority is satisfied that the injurious effect is eliminated; or
- (b) in the case of specified countries, the exporters agree to revise their prices so that the injurious effect of the subsidy is eliminated, and the authority is satisfied it is eliminated.
A proviso says a price increase under clause (b) must not be higher than necessary to eliminate the amount of subsidy. A further proviso lets the investigation be completed and a finding recorded if the Central Government so desires or the exporting country's government so decides.
Conditions and effects (17(2) to (7))
| Sub-rule | Provision |
|---|---|
| 17(2) | No undertaking on price increase is accepted unless the authority has made a preliminary determination of subsidisation and injury. An undertaking from an exporter is accepted only when the authority has also obtained the consent of the exporting country |
| 17(3) | The authority may decline any undertaking it considers impracticable or unacceptable for any other reason |
| 17(4) | It intimates the Central Government and issues a public notice, including the non-confidential part of the undertaking |
| 17(5) | While the undertaking remains valid, the Government may not impose duty under section 9(2) |
| 17(6) | The authority may require the exporting government or exporter to give information and permit verification. Provisos (substituted by Notification No. 10/2020-Cus. (N.T.) dated 2-2-2020) let it obtain information periodically from the producer or importer and verify on site; on violation, it informs the Government as soon as possible and recommends immediate provisional measure using the information available. Definitive duties may be levied on product entered for consumption not more than ninety days before the provisional measures, but not on imports entered before the violation |
| 17(7) | The authority reviews from time to time the need for continuing an undertaking, suo motu or on request from exporters, importers or any other interested person |
The CVD undertaking has features that the anti-dumping rule 15 lacks: the exporting government can itself offer an undertaking, and an exporter's undertaking needs that government's consent.
Rule 18: disclosure
Before final findings, the authority informs all interested parties and interested countries of the essential facts under consideration which form the basis of its decision, and permits the interested parties to defend their interests. Confidential information remains protected under rule 8, as our article on Rules 6 to 10 explains.
Practical points
| Stage | Action |
|---|---|
| Preliminary finding | Test the subsidy amount and basis, and the injury reasoning |
| Provisional duty | Note the sixty-day earliest date and four-month limit when planning cost |
| Termination | Check the one, two, four and nine per cent figures in rule 16 |
| Undertaking | Government-level undertakings under 17(1)(a); exporter undertakings need the government's consent |
| Disclosure | Respond to the essential facts within the time given |
Injury principles that feed the preliminary finding are in Rule 13 and Annexures I and II; what follows is in Rules 19 to 23A. If you want advice on an undertaking or termination argument, our legal dispute resolution team can help.
Need help at this stage?
The window between a preliminary finding and the final finding is short. Our legal dispute resolution team can help check the thresholds in rule 16, prepare comments on the preliminary finding and advise on an undertaking.
Key takeaways
- Provisional duty cannot start before sixty days from the initiation notice and lasts not more than four months.
- Termination is mandatory if subsidy is below one per cent ad valorem, or two per cent for a developing country product.
- A developing country product is also protected by a four per cent import share test, with a nine per cent collective exception.
- The exporting government can offer an undertaking; an exporter's price undertaking needs that government's consent.
- Violation of an undertaking can lead to provisional measures and limited retroactive duty up to ninety days.
- Interested parties and countries must be told the essential facts before final findings.
Read next
- Rule 13 and Annexures I and II: determining injury
- Rules 19-23A: final findings, levy, refund and new shipper review
- Anti-dumping rules 12-16: preliminary findings and price undertakings
- Safeguard and countervailing duty explained
Disclaimer: Based on the Customs Tariff Act rules named above as published on the CBIC Tax Information Portal or in the Gazette, with the 2024 amendment to the countervailing duty rules read through a TaxClue consolidated reading text (no official consolidated text exists), as consulted on 3 October 2026. Later notifications, duty notifications and the Customs Tariff Act, 1975 should be checked. This article is general information, not legal advice; check the official text before acting.