Delhi: India has thwarted an European Union (EU)
attempt to institute a WTO investigation into the additional
customs duties it imposes on imported liquor.
EU has maintained that the additional import duties
imposed by India on foreign liquors are not compliant
with WTO norms and had asked for an investigation by
a panel of the WTO''s Dispute Settlement Board. The United
States is also likely to ask for similar proceedings.
now, WTO will automatically launch an investigation,
once the EU repeats its request for dispute settlement.
officials said the finance ministry is likely to introduce
a legislation soon to scrap the additional customs duty
on foreign wines and spirits. The legislation would
allow states to charge extra duty on imported wines
per India''s commitments to WTO, basic customs duty on
imported wines would be capped at 100 per cent while
spirits like whiskey and vodka would attract 150 per
cent. Additional customs duty in the form of countervailing
duty on imported spirits and wines was imposed in 2001
to create a level playing field between domestic and
foreign liquor companies as states cannot levy duties
on foreign made liquor.
customs duty in foreign spirits ranges from 25 per cent
to 150 per cent while on imported wines, the duty is
20 per cent to 75 per cent . But due to a combination
of customs and the additional duties, the effective
import duty goes up to a huge 264 pc for wines and 550
per cent for whiskies, depending on the brand.