Government of India finally removed the ACD on wines and spirits yesterday but increased the basic duty from 100% to 150%. Duties on beer and liquor remains unchanged at 100% and 150% respectively.
Following complaints from the EU and US on high duties levied by India and possibly Baron Vijay Mallya of White & Mackay, the Finance Ministry withdrew yesterday all additional customs duties (ACD) on imported wines, beer and liquor through a notification by Central Board of Excise and Customs.
As reasoned and predicted by delWine, the government has increased the basic customs duty on wines from 100 to 150 per cent, the upper limit allowed by WTO. Thus the total duty on wine gets reduced from a max. of 266%. Liquor is a bigger beneficiary as the basic duty was already 150%; and there is no increase. On the other hand the elimination of ACD will bring the duties down from the earlier max. of 550%.
The removal of the duty comes shortly before the meeting of a WTO panel to consider the complaint of European Union and the USA against high Indian duties and taxes on foreign wines and spirits. The government had been saying all along that they would like to settle the issue before the WTO would take a negative decision.