Assocham opposes duty cut on whisky, spirits

New Delhi, Mar 7 (UNI) Industry chamber Assocham today strongly opposed the demand of European Union (EU) for reduction of additional custom duties on whisky and spirits, until level playing fields is provided between Indian and foreign liquor producers.

''If the additional duties on wines and spirits are scrapped under the WTO pressure, a lot of cheap whisky would flood the Indian market,'' Assocham President Venugopal N Dhoot said in a communication to the government.

He said this will impact the state government's revenue as this industry generates close to Rs 30,000 crore to the government exchequer, pointing out that the domestic industry also generates employment to over 3-4 lakh people both directly and indirectly.

The chamber has suggested that the EU should provide a clear picture of the subsidies granted to their domestic producers and also remove the barriers to Indian spirits exporters before seeking for reduction in additional customs duty.

He also cautioned that the rationalisation of duty structure on imported whisky and wines as sought by EU under the pretext of WTO clause will dump overseas liquor and wines into India.

The EU has accused India for practicing discriminatory market access by the high duty levied on the imports of wines and spirits.

The additional custom duties are levied on top of high federal Basic Customs Duties (of 150 per cent for spirits and 100 per cent for wines), raising the cumulative federal duty burden to between 177 per cent and 540 per cent (depending on the import price of the products).

This is the first step for the dispute settlement procedure of the WTO, if the two parties fail to get mutually agreeable solution in these consultations, a panel under the Dispute Settlement Body would be established.

Mr Dhoot hoped that an amicable solution would be reached on the issue with the EU as there are genuine concerns of domestic industry not just in terms of revenue loss but also on reciprocity.

UNI