The U.S. appeal was filed last week and has been posted on the WTO's Web site. US had made it clear at the time of rejection of its claim that it would appeal the decision. At the time the original complaint was filed, the issue related only to the Additional Duties.
The verdict was not a total loss for the United States because India did waive Additional duties in July 2007 buckling under heavy pressure from the US and Europe. On 24 May 2007, the United States had requested the establishment of a panel which was composed on 3 July 2007. Next day, the government had announced eliminating the Additional Duties.
EU had dropped its complaint as a result. However, Washington continued to press its case, numbered DS360R. Its complaint was rejected by WTO in February this year.
While rejecting the complaint by the US, the WTO had concluded, 'we do not wish to suggest that the entry into force of the new customs notifications necessarily implies that the AD (Additional Duty) on alcoholic liquor, to the extent it still exists, and the SUAD (Sales Tax, Value Added Tax, local tax or any other charges ) are WTO-consistent.'
India's basic import duties on wine and spirits touched 150 percent, within WTO limits. However, various state governments levy surcharges that take the charges up to as high as 430% on wine, in Maharashtra which charges 200% additional excise duty on foreign wines. Tamil Nadu has shut out foreign liquor totally and allows the sale of Indian wine and spirits only.
The U.S., EU and Japan, by contrast, allow nearly all spirits to enter their markets duty-free. China tacks only a 10-percent charge on foreign liquor, according to IHT. US claims that wine sales in India through special duty-free rules, such as at airports and luxury hotels grew by 350 percent between 2000 and 2005
Subhash Arora
August 10, 2008
It would appear that the Indian government had an inkling about the anticipated action by the US. It has been applying persuasive pressure on Maharashtra to evolve a policy which cannot be challenged by WTO. It is in that light that the Maharashtra excise has suspended issuing any Transfer Permits until the new policy comes into place. With the Appeal being filed, it is expected that both the governments will now speed up their action and the State wil come out of the impasse-editor |