EU requests new WTO consultations on Indian wine and spirits taxes

The European Union (EU) requested World Trade Organization (WTO) consultations with India on its domestic tax regime for spirits and wines, on September 22, 2008. The request follows a similar WTO panel in 2007 on India's wines and spirits duties, which was suspended when India changed some elements of its law. These new consultations will 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, Maharashtra and Tamil Nadu. These states are among India's largest markets for wines and spirits.

The custom tariff for imported bottled wines and spirits at the Indian border is already 150 per cent. Discriminatory internal taxation in some Indian states adds further to this burden for importers. For example, Maharashtra imposes a special fee on imported wines and exempts locally-produced wines and spirits from excise duty. Goa adds an import and 'label-recording' fee to the cost of imported wines and spirits. In both cases, internal taxes are applied only to imported wines and spirits, or at a much higher rate for imports than domestic goods.