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Economy – Part 1 (Ensure PT)

GST: Anti-profiteering Panel

The GST Council headed by Union Finance Minister comprising of state finance ministers as members have decided to set up a five-member anti-profiteering authority to decide on levying the penalty if businesses do not pass on the benefit of price reduction to consumers under GST regime. The GST Council has also approved the anti-profiteering rules.

The anti-profiteering committee would be headed by a retired secretary-level officer. The authority would ask the businesses to pass on the benefit of price reduction on a proportionate basis to consumers.

Apart from the chairman, the other members of the committee will be joint secretary-level officers who have been commissioners in central excise and service tax either at the Centre or states.

The government will constitute a search-cum-selection committee for finalising the members of the anti-profiteering authority.

In cases where consumers cannot be identified, the amount would be credited to the consumer welfare fund.

The committee would be given powers to take Suo Motu action, besides acting on complaints of profiteering.

The complaints of profiteering will initially come to the Standing Committee constituting of tax officials from states and the Centre. Then the complaint will be forwarded to the  Directorate of Safeguards (DGS) for investigation, which will take about 2-3 months to complete the inquiry.

After the investigation, the report would be submitted to the anti-profiteering authority which will take a decision on the penalty.

The anti-profiteering authority will have a sunset date of two years and will decide on the penalty to be levied.

Directorate of Safeguards (DGS)

It works under Central Board of Custom and Revenue, Department of Revenue, Ministry of Finance.


A safeguard is a form of temporary relief. They are used when imports of a particular product, as a result of tariff concessions or other WTO obligations undertaken by the importing country, increase unexpectedly to a point that they cause or threaten to cause serious injury to domestic producers of “like or directly competitive products”. Safeguards give domestic producers a period of grace to become more competitive vis-à-vis imports.

If this happens, the government of the importing country may suspend the concession or obligation, but will be expected to provide compensation by offering some other concession. Otherwise, the affected WTO member(s) can retaliate by withdrawing equivalent concessions. Industries or companies often request safeguard action by their governments.

Safeguards usually take the form of increased duties to higher than bound rate or standard rates or quantitative restrictions on imports.


Safeguards can be seen as the brakes on the trade liberalization car. By offering a temporary escape route, safeguards give WTO members, confidence to offer each other greater liberalization measures in trade negotiations than they might otherwise do.


The roots of this trade remedy lie in Article XIX of GATT, 1994 (and its pre-WTO version). This provision allows a WTO member to restrict temporarily imports of a product (known as ‘safeguards’ action) if its domestic industry is affected by a surge in imports.

Safeguards were rarely used before the Uruguay Round. Some governments preferred to protect their domestic industries by persuading exporting countries to restrain exports “voluntarily” or to agree to other means of sharing markets. “Grey area measures” of this kind, circumventing the GATT were negotiated bilaterally for a wide range of products including motor vehicles, steel and semi-conductors. These measures were not subject to multilateral discipline through the GATT and their legality was doubtful. Some safeguard actions actually taken under Article XIX were left in place indefinitely, providing a permanent level of protection.


The Agreement on Safeguards sets out the rules for application of safeguard measures and requirements for safeguard investigations by national authorities. The Agreement emphasizes transparency and avoidance of arbitrariness through laying down rules. The goal of the Agreement is to encourage structural adjustment on the part of the industries adversely affected by increased imports, thereby enhancing competition in international markets.

The agreement also aims to cure the problems caused by ‘grey area measures’, permanent safeguard actions, Voluntary Export Restrains and orderly marketing arrangement. The Agreement prohibits the future use of ‘grey area measures’ for the purpose of trading multilateral control. The Agreement on Safeguards requires the existing ‘grey area measures’ to be phased out and to be brought in conformity into the Agreement on Safeguards by the end of December, 1998.


A safeguard measures may be applied when:

  • there are increased imports – the increased quantity of imports may be either an absolute increase or an increase relative to domestic production.
  • There is serious injury or a threat of serious injury –

‘Serious injury’ is defined as a significant overall impairment in the position of a domestic industry. In determining whether serious injury is present, investigating authorities must evaluate all relevant factors having a bearing on the condition of the industry, including the absolute and relative rate and amount of increase in imports, the market share taken by the increased imports, as well as changes in level of sales, production, productivity, capacity, utilization, profit and losses, and employment of the domestic industry.

‘Threat of serious injury’ means a clear and imminent danger of serious injury.

There must be objective evidence of the existence of a causal link between increased imports of the products concerned and serious injury. Injury caused to the domestic industry at the same time by factors other than increased imports must not be attributed to increased imports to the domestic industry.

‘Domestic industry’ means the producers –

  1. as a whole of the like article or a directly competitive article in India; or
  2. whose collective output of the like article or a directly competitive article in India constitutes a major share of the total production of the said article in India.


The WTO principle of non-discrimination is embodied in the Agreement on Safeguards. It provides that, in most cases, safeguard measures must be applied on a non-selective (most favoured nation or “MFN”) basis, must be progressively liberalized while in effect and give rise to a duty on the member imposing them to compensate other members whose trade is affected.


No safeguard measures may last longer than four years, unless through a new investigation its continuation is found to be necessary to prevent or remedy serious injury and there is evidence that the industry is adjusting. The sum of the initial period of application and any extension may not exceed eight years (or ten years for developing countries). In addition, safeguard measures due to last longer than one year must be progressively liberalized at regular intervals during the period of application. This requirement also carries over into any extended period.


Safeguard measures shall not be applied against a product originating in a developing country Member as long as its share of imports of the product concerned in the importing Member does not exceed 3 per cent, provided that developing country Members with less than 3 per cent import share collectively account for not more than 9 per cent of total imports of the product concerned.


The Committee on Safeguard is set up to monitor, report on and make recommendations to the Council for Trade in Goods on the implementation and operation of the Agreement on Safeguards; review WTO members’ notifications; make findings as to another member’s compliance with respect to the procedural provisions of the Agreement on Safeguards for the application of safeguard measures, when requested by a WTO member; assist with consultations; monitor the phasing out of pre-existing measures; and review proposed suspension of concessions in the absence of compensation.


The Customs Tariff Act, 1975 has been amended to include various provisions for giving relief to the domestic producers against injury caused to them by imports in accordance with the Agreements. These include Section 8B, Section 8C, Section 9A, Section 9B and Section 9C of the Customs Tariff Act, 1975 and the Rules made thereunder. These provisions are aimed at offsetting the adverse effects of increased imports, subsidized imports or dumped imports & imports from Peoples’ Republic of China. The Customs Tariff (Identification and Assessment of Safeguard Duty) Rules, 1997 and Customs Tariff (Transitional Products Specific Safeguard Duty) Rules, 2002 govern the procedural aspects.


Anti-Dumping Duty
Countervailing Duty
Safeguard Duty
If the goods are imported at dumped prices. If the goods were subsidised in the country of export If the goods have entered in increased quantities
If the dumped imports cause or threaten to cause material injury or material retardation of the establishment of a domestic industry. If the subsidised imports cause or threaten to cause material injury or material retardation of the establishment of a domestic industry. If the increased imports cause or threaten to cause serious injury to the domestic producers of like or directly competitive products.











The Safeguard duty Rules require that in case the injury to the domestic industry is caused due to dumping, the domestic industry should seek for the imposition of anti-dumping duty and not safeguard duty.


The Final Findings and the Recommendations of the Director General is considered by the Standing Board on Safeguards under the chairmanship of Commerce Secretary. Then the views of the Standing Board on Safeguards are placed before the Finance Minister for approval in respect of Safeguard Duties & to the Commerce Minister for imposition of Quantitative Restrictions.

Mumbai’s Taj Mahal Palace Hotel acquires ‘Image Trademark’

  1.  Mumbai’s Taj Mahal Palace hotel has acquired an ‘image trademark‘ under the Trademark Act of 1999, making it is the first building in the country to acquire intellectual property rights protection for its architectural design.
  2. The hotel which was opened on December 16, 1903, has a distinctive red-tiled Florentine Gothic dome and sits 240 feet above the street level. The dome for a long time has been used by the Indian Navy as a `triangulation point’ which guides its vessels to the harbour. The architects of the dome have modelled it on the dome of the Victoria Terminus (now Chhatrapati Shivaji Terminus).
  3. Taj Mahal Palace hotel has acquired image trademark, no one can use the Taj Mahal Palace’s images for commercial purposes without paying the company a licensing fee
  4. The other trademarked properties around the world include Empire State Building in New York, the Eiffel Tower in Paris and Sydney Opera House in Australia.

Trademark Act of 1999

The Act deals with the precise nature of rights one can acquire in respect of trademarks.





June 22, 2017

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