EU whines against Andhra Pradesh’s tax hangover

NEW DELHI: The European Union (EU) has lodged a fresh complaint at the World Trade Organization (WTO) against the ���discriminatory��� taxes on imported liquor levied by some Indian states. It has alleged that domestic taxes and fees imposed on imported liquor by state governments are higher than those levied on local producers.

This time, EU has pointed fingers at Andhra Pradesh, which it says imposes an ���assessment fee��� on imported liquor that is inversely proportional to the value of the imported product, a commerce department official said. The duty structure translates to higher levies for cheaper imported liquor.

EU alleged that the fee, in the range of 15-100% for imported wines and 60-200% for imported spirits, violates WTO norms as it is not applied on domestic-made liquor. It has called for bilateral consultations with India on the issue.

As per WTO norms, a country has to give national treatment (similar to the one for the local industry) to products of other member countries once they enter the domestic market. Hence, foreign liquor should be subjected to local taxes only if similar taxes are applied on local liquor.

The EU had, earlier, complained against the local taxes imposed by Karnataka, Goa and Maharashtra which were in excess of those applicable on local producers.

A commerce department official told ET that the Centre has been talking to states that are on the EU radar and was hopeful that the necessary changes would be made. ���We will get in touch with the AP government too, and see what could be done to address the EU���s concern,��� the official said.