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According to a newspaper report, The European commissioner for agriculture and rural development, Mariann Fischer Boel, said the state variations in taxes were unacceptable to them. She was in Delhi to attend the ministerial meeting of the WTO as reported in delWine earlier. Speaking to reporters, Boel reportedly said: "We want to secure access to Asian, especially the Indian, market for our refined products."
She expressed disappointment that in areas where Europe has huge potential, like wine and spirits, there were taxation problems. "This is not acceptable," she said.
With regard to an India-Europe free trade agreement, she said there was a balance but a look at the agriculture trade shows that while Europe agro- exports to India were about €250 million, India exported products worth €2 billion. "We would like to see dynamism," she said.
India has managed to keep duties high on wines and spirits despite losing on the issue at WTO. This may change as 153 nations are negotiating another round of duty cuts and trade liberalisation.
Imported liquor attracts a basic customs duty of 150 per cent in India, over and above which certain states like Delhi, Karnataka, Andhra Pradesh and Maharashtra impose certain local taxes and countervailing duties, which takes the total duties levied to 200-500 per cent. Maharashtra has recently brought down the excise duties to a more reasonable level.
WTO’s principle of ‘national treatment’ implies that each WTO-member country should treat foreign goods (once basic customs duty is paid) at par with similar local products.
Under its WTO obligations, India can impose a maximum basic customs duty of 150 per cent on wines and spirits. The additional duties are a matter of state jurisdiction, as provided in the Indian Constitution. |