The EU is already in consultation with India on the issue of high local taxes applied by the states of Maharashtra, Tamil Nadu, Karnataka and Andhra Pradesh on imported wines and spirits, which it claims, violates multilateral trade rules laid down by WTO.
Although the EU has not yet asked for setting up of a dispute settlement panel at the WTO, senior EU officials have hinted that if the consultations don’t work out, they would approach the WTO for a decision, says the report in ET.
“We are already talking to state governments on the issue of local levies on imports raised by the EU in the past. After studying the new submission, we will extend our discussions to cover the new issues as well,” a commerce department official, who did not wish to be named, reportedly told ET.
The EU delegation pointed out that Delhi applied vend fee at higher rates on imported wines and spirits than similar domestic products. This, it said, is inconsistent with India’s obligations under the WTO.
On the issue of ``discriminatory sourcing’’ of liquor by APBCL which has the sole authority of buying liquor for the state on behalf of the government, the EU pointed out that it appears to stock predominantly domestic wines and spirits for general sale and does not afford the European enterprises adequate opportunities to compete.
Similarly, the TASMAC, which sources liquor in Tamil Nadu, placed an isolated limited import order in October 2008. Apart from that the wholesale and retail of imported wines and spirits for general sale have been de facto denied in Tamil Nadu, the EU submission noted.
Under the Indian Constitution, states have the independent authority to control the sale and distribution of liquor in order to reduce the consumption of alcohol. This power is openly flaunted and is a big source of illegal gratification. |