EU to drag India to WTO seeking market for wines and spirits

The European Union today said it will drag India to WTO for the second time in less than two years seeking removal of high tariff on wines and spirits, particularly in Goa, Maharashtra and Tamil Nadu.     

The EU will "request WTO consolations with India on its domestic tax regime for spirits and wines", EU said in a statement posted on its website.     

It said the EU would seek clarifications from India on the way tax legislation and other measures on market access for wine and spirits are applied in states such as Goa, Tamil Nadu and Maharashtra.

The customs for imported wines and spirits is as high as 150 per cent in India. Discriminatory internal taxation in some Indian states adds further to this burden for importers, the EU statement said.    

It said Maharashtra imposes special fee on imported wines but exempts local wines and spirits from excise duty. Goa adds an import and label-recording fee to the cost of imported wines and spirits. "This is a breach of the WTO's national treatment principle which requires the WTO members treat imports and domestic goods the same," EU said.     

Goa, Maharashtra and Tamil Nadu are among India's largest markets for wines and spirits.     

The request for consultations follows a similar challenge which the EU had posed to India in the World Trade Organisation in 2007 which was later suspended.     

When a country makes a request for consultations, it formally initiates a dispute under the WTO Dispute Settlement Mechanism.      

If the consultation do not resolve the issues within 60 days, the EU may seek establishment of a dispute settlement panel like it did in 2007.