Brussels, 22/09/2008 (Agence Europe) - On Monday 22 September 2008, the EU called for new talks at the World Trade Organisation over India's import scheme for wine and spirits. Following India's suspension in July 2007 of local “additional” taxes in some Indian states on top of national customs duty on imported wine and spirits, the EU suspended its complaint to the WTO against India's import scheme (see EUROPE 9469). The aim of the new talks would be to gain clarification on the way some Indians states (Goa, Maharashtra and Tamil Nadu) apply tax rules and other measures to restrict market access.
The national wine import duty is currently 150% (New-Delhi raised it to partly compensate for the elimination of the additional local taxes, which at times raised the overall duty due in India on imports of wine to 264% and on spirits to 550%), but the duty levied by some Indian states raises costs for EU exporters. The state of Maharashtra, for example, levies special taxes on imported wine but exempts locally produced wine and spirits from duty. The state of Goa, adds an import tax and a labelling tax to imported wine and spirits. In both cases, the Commission believes that local taxes only apply to imported wine and spirits or are applied at a beneficial rate for local products. In addition, the Commission considers that despite recent changes to legislation, there are no clear indications that the restrictions applied in the state of Tamil Nadu have ceased (where special taxes only seem to be levied on imported wines and spirits).
If no satisfactory solution is found after 60 days of new talks, the EU can request the formation of a WTO dispute resolution panel to decide on the issue.
According to EU industry, India is one of the most promising markets in the world, with sales of 150 million 9-litre boxes of spirits and 1.5 million boxes of wine a year. The EU exported €57 million worth of spirits and €11 million worth of wine in 2007. Total EU exports of spirits to 150 countries of the world totalled €7 billion in 2007, with exports of wine totalling €6 billion. (E.H./transl.fl)