India could be heading for trouble with the European Commission (EC) for its import tariff regime on imported alcoholic beverages, reports The Economic Times .

An EC investigation into India 's multi-layered taxation policy on bottled-in-origin (BIO) liquor is likely to conclude that the additional customs duty levied on wine and spirits must be lifted and that states have to go for rationalisation of taxes.

Around eight months back, the EC had initiated an investigation under the Trade Barrier Regulation after a complaint that India's tariff regime on liquor included a variety of discriminatory indirect taxes and fees imposed by the states, which goes against the 'national treatment' for imports as required under GATT and WTO.

India, on the other hand, has maintained that this is not a WTO problem but has conceded that something needs to be done. The Ministry of Food Processing set up a joint working group to look into a uniform taxation policy for alcoholic beverages, including imported products.