USTR Takes Issue With Additional Indian Duty On Wine And Spirits

by Glen Shapiro, LawAndTax-News.com, New York

09 March 2007

The United States this week requested World Trade Organization dispute settlement consultations with India over the customs duties that India imposes on imports of wine and distilled spirits.

On top of its basic customs duties, India imposes an “additional duty” and an “extra additional duty” on imports of wine and distilled spirits, resulting in aggregated duties on these imports that range from approximately 150-550%.

Under its WTO commitments, however, India agreed that its tariffs on wine and spirits would not exceed 150%.

“With its fast-growing middle class, India could be an important export market for American wines and distilled sprits if not for these layers of duties,” observed US Trade Representative Susan C. Schwab.

She continued:

“We have raised this issue with the Government of India on several occasions over a number of years. We hope the matter can be successfully resolved in WTO consultations.”

Consultations are the first step in a WTO dispute. Under WTO rules, parties that do not resolve an issue through consultations may refer the matter to a WTO dispute settlement panel.

The European Commission has also requested WTO dispute settlement consultations on India’s duties on wine and distilled spirits.

According to the Office of the USTR, the United States requested to join these consultations, but India denied the US request. WTO rules specifically provide that a Member, whose request to join consultations as a third party is denied, may request consultations in its own right.

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