EU Takes Issue With Indian Duty Levels On Wine And Spirits

by Ulrika Lomas, for LawAndTax-News.com, Brussels

21 November 2006

The European Commission on Monday requested formal consultations with India under the auspices of the World Trade Organisation, regarding India’s import regime for spirits and wines.

The decision follows an investigation carried out under the framework of the European Union’s Trade Barriers Regulation (TBR), at the request of the European Spirits Organisation (CEPS) and the Comité Européen des Entreprises Vins (CEEV).

The European Union Trade Barriers Regulation investigation concluded that access to the potentially large Indian market for spirits and wines is severely restricted due to a high duty burden and restrictions on retail distribution in certain Indian States.

The EC stated on Monday that:

"The European Union considers that these trade barriers are in clear breach of international trade rules. After having allowed India a considerable period of time to address the problem, the EU now hopes to use the WTO consultation process to arrive at a mutually satisfactory solution with India."

It went on to explain that:

"The key issue at stake is high Additional Duties levied on imported spirits and wines. The Additional Duties are levied on top of high federal Basic Customs Duties (of 150% for spirits and 100% for wines), raising the cumulative federal duty burden to between 177% and 540% (depending on the import price of the products)."

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