EU seeks cut on levies on wines

The European Union (EU) has warned that it will drag India to the World Trade Organization (WTO) 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 WTO again,” spokesperson for the EU Agriculture and Rural Development, Michael Mann, told Indian journalists visiting the EU headquarters.

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

Mann said EU wanted to “get rid of discriminatory tariff formula” by India, particularly at the state level.

The European Commission had taken India to WTO in 2007, seeking redressal of its grievances, which included denial of ‘national treatment’ to liquor imported from Europe. Under the national treatment rules, the imported products have to be treated on a 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 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 of imported wines and spirits in India, impose special fee on these products.