Stating that the Indian taxation structure on imported wines and spirits is a violation of international trade laws, the European Union has sought a level playing field and greater market access.
Imported liquor faces a high additional duty of customs apart from basic customs duty. This apart, several states also levy steep duties making the imported liquor expensive for the end-users.
Mr Jean-Francois Brakeland, Head of Unit - Legal Aspects of Trade Policy, European Commission, said, “We wanted to clarify on what was going on regarding the taxation. We have to get clear signals. However, if we do not have a satisfactory response, we will have a panel against India on the issue.”
The EU delegation is in New Delhi to hold the third round of the WTO dispute consultations, focusing mainly on discriminatory tax measures which Andhra Pradesh applies in imported wines and spirits. It also noted that the protectionism measures adopted by India would stiffen competition in the wine and spirits market.
“The choice of the venue being kept New Delhi, is the sign of EU’s willingness to solve this long standing dispute and to allow India to bring all the relevant experts for discussion,” he added.
The EU’s exports of spirits to India amounted to €52million out of a total of €6.4 billion. The wines exports stood at €8 million out of a total of €6.2 million.
The four states represent together more than 50 per cent of the Indian consumptions for wines and spirits and are potentially very significant market for the EU. “We had various rounds of consultation with officials in India. Certain taxation is a violation of international trade law and we are seeking a level-playing field. Due to the high taxation structure, the aggregate duty level ranged between 200-800 per cent,” said Ms Danièle Smadja, Head of the Delegation of the European Commission.
Source : Business Line