The Associated Chambers of Commerce and Industry of India (Assocham) has opposed EU's demand to reduce the countervailing duties, known better as additional customs duty (ACD) on whiskies and spirits ‘ until level playing fields is provided between Indian and foreign liquor producers.'
In a communication to the government, ASSOCHAM President, Mr. Venugopal Dhoot has said that if the additional duties on wines and spirits are scrapped under the WTO pressure, a lot of cheap whisky would flood the Indian market.
This will definitely impact the state governments revenue as this industry generates close to Rs.30,000 crore to the government exchequer, added Mr. Dhoot, pointing out that the domestic industry also generates employment to over 3 to 4 lakh people both directly and indirectly.
EU considers that India 's measures over import of wine and spirits are inconsistent with India 's obligations under the GATT 1994. In particular, India has acted inconsistently with Article II: 1(a) and (b), by failing to accord to the commerce of another Member treatment no less favourable than that provided for in India's tariff schedule annexed to the WTO Agreement.
‘The government should not yield to the pressure of overseas whisky and spirit manufacturers under protection from EU and reduce the tariffs which will amount to harming interest of domestic liquor and wine industry', emphasised Mr. Dhoot.
He also cautioned that the rationalisation of duty structure on imported whiskies and wines as sought by EU under the pretext of WTO clause will dump overseas liquor and wines into India which in view of ASSOCHAM is totally uncalled for.
Looking at the detailed report at http://www.assocham.org one gets the impression that Assocham is not differentiating between wine and spirits. It is not clear whether they are afraid of cheap whisky coming in or wines too. What we are getting now are more of the cheap, entry level imported wines since the high duties obstruct the sales of better quality wines. Reduction of duties will make better quality wines more affordable and increase their demand and consumption.-editor