EU may take India to WTO again; seeks cut on wine levies

I / Brussels October 15, 2009, 13:17 IST

The European Union has warned that it will drag India to the World Trade Organisation if New Delhi does not slash taxes on wines and spirits imported from Europe.     

"We are trying to negotiate with India on the wines and spirit issue... We won't mind going to the WTO again," spokesperson for the EU Agriculture and Rural Development Michael Mann told Indian journalists visiting the EU headquarters.     

India had in 2007 slashed the additional customs duty it charged on imported (which were up to 150 per cent of value of imports depending on the spirits), but simultaneously hiked the basic customs duties to 150 per cent from 100 per cent.     

Mann said the EU wants to "get rid of discriminatory tariff formula" by India, particularly at the state level.     

The European Commission had earlier taken India to WTO in 2007 seeking redressal of its grievances which included what it called denial of 'national treatment' to liquor imported from Europe.     

Under the national treatment rules, the imported products have to be treated at par with domestic items.

The WTO consultation process on the issue was suspended following some corrective actions by New Delhi in 2007. However, the 27-nation bloc which produces some of the finest wines and Scotch whisky in the world is not completely satisfied because of the increase in basic duty.     

Over and above the import levies, states like Goa, Tamil Nadu and Maharashtra which are the major consumers on imported wines and spirits in India impose special fee on these products.