WORLD TRADE  
ORGANIZATION  WT/DS380/1/Add.3 
G/L/855/Add.3 
G/SCM/D79/1/Add.3 
18 November 2009 
 (09-5705) 
 Original:   English 
  
 
INDIA – CERTAIN TAXES AND OTHER MEASURES ON  
IMPORTED WINES AND SPIRITS 
 
Request for Consultations by the European Communities
 
 
Addendum  
   The following communication, dated 16 November 2009, from the delegation of the European Communities to the delegation of India and to the Chairman of the Dispute Settlement 
Body, is circulated in accordance with Article 4.4 of the DSU. 
 
_______________ 
 
  The European Communities hereby re quests supplementary consultations
1 with India 
pursuant to Article 4 of the Understanding on Rules and Procedures Governing the Settlement of 
Disputes  (DSU) and Article XXII:1 of the General Agreement on Tariffs and Trade 1994  
(GATT 1994) regarding discriminat ory taxation applied on imported bottled wines and spirits by the 
National Capital territory of Delhi as well as the di scriminatory practices of the state-owned Andhra 
Pradesh Beverages Corporation and of the Tamil Nadu State Marketing Corporation Limited, in 
supplying and distributing wines and spirits.  These measures adversely affect exports of wines and 
spirits (codes 22.04, 22.05, 22.06 and 22.08 of the Harmonised System) from the European Communities to India.  Discriminatory taxation applied by Delhi 
  
 
 The European Communities understands that the National Capital territory of Delhi applies 
the "vend fee" on wines and spirits in a way that su bjects imported wines and spirits to internal taxes 
in excess of domestic like products. Pursuant to No tification No F.10(13)/fin.(T1E)/2008-09 of 4 June 
2009 the "vend fee" appears to apply on imported wi nes and spirits at higher rates than on domestic 
like products  and in accordance with a different stru cture and taxable basis, as compared to the "vend 
fee" on domestic wines and spirits, as laid down in Notification No F10 (27)/2001 Fin 
(E-1)(i)/223/kha of 29 June 2001.   
                                                     
 
1 This request supplements the request of consultations entailed in document WT/DS380/1, G/L/855, 
G/SCM/D79/1 dated 25 September 2008 as well as the supplementary request entailed in document 
WT/DS380/1/Add.1, G/L/855/Add.1,  G/SCM/D79/1/Add.1 dated 17 D ecember 2008 and the subsequent 
request entailed in document  WT/DS380/1/Add.2, G/L/855/Add.2, G/SCM/D79/1/Add.2 of 6 May 2009 with 
regard to measures not mentioned in the previous requests. WT/DS380/1/Add.3 
G/L/855/Add.3 G/SCM/D79/1/Add.3 
Page 2 
  
   The measures in question include but are not limited to: 
 
– Sections 34 and 58 of the Punjab Excise Act 1914 
– The Delhi Liquor Licence Rules, 1976, as amended;  
– Notification F10(27)/2000 Fin E-1/ 781 of 28 September 2000 
– Notification F10(27)/2001.Fin(E- 1)(i)/223/kha of 29 June 2001 
– Notification No F.10(13)/fin.(T1E)/2008-09 of 4 June 2009 
 The European Communities considers that  these measures are inconsistent with Article III , 
paragraph 2  of the GATT 1994. In particular: 
 
– The "vend fee" is inconsistent with I ndia's obligations under Article III:2 of the 
GATT 1994, because it subjects imported bottled wines and spirits to internal taxes 
that are in excess of internal taxes applied on domestic like products. 
The discriminatory practice of the Andhra Pradesh Beverages Corporation 
 
  Rule 4 of the Andhra Pradesh (Regulation of wholesa le trade and distribution and retail 
trade in India liquor, wine and beer) Act, 1993  establishes the Andhra Pradesh Beverages Corporation 
Limited (APBCL) as a corporation wholly owned and controlled by the Government of Andhra 
Pradesh that has the exclusive privilege of impor ting, exporting and carrying out the wholesale trade 
and distribution of inter alia   Indian liquor, foreign liquor and wine , on behalf of the Government for 
the whole of the state.  
 
 However, APBCL's practice appears to stock predominantly domestic wines and spirits for 
general sale and does not afford the European enterprises adequate opportunities to compete for 
participation in APBCL's purchases and sales. Nota bly, no tenders to supply imported wines and 
spirits from outside India appear to have been issu ed to date. This practice seems to be confirmed by 
the information available on the official website of  APBCL about the Corporation's main functions, as 
well as by the indication that tenders for procurement of wines and spirits issued so far are related to 
the supply of domestic wines and spirits only.   
 The measures in question include but are not limited to: 
 
– Section 68-A of the Andhra Pradesh Excise Act, 1968; 
– The Andhra Pradesh (regulation of wholesale trade and distribution and retail trade in 
India liquor, wine and beer) Act, 1993, as amended; 
– The Andhra Pradesh prohibition Act , 1995 (Act 17 of 1995), as amended; 
– Andhra Pradesh Act 5 of 1997; 
– The procurement policy of the Andhra Prad esh Beverages Corporation limited as 
published under 
http://www.apbcl.gov.in/tenders&notis.html ;  WT/DS380/1/Add.3 
 G/L/855/Add.3 
 G/SCM/D79/1/Add.3 
 Page 3 
  
  – The Andhra Pradesh Beverages Corporation Limited  "Information hand book" as 
published under 
http://india.gov.in/allimpfrms/allannouncements/3424.pdf ; 
– APBCL practice 
The European Communities considers that the meas ures are inconsistent with India's obligations 
under the GATT 1994, in particular: 
 
– India fails to accord imported wines and spir its treatment no less favourable than that 
accorded to like products of national origin  in respect of all laws, regulations and 
requirements affecting their internal sale, offering for sale, purchase, transportation 
distribution or use in breach of Article III:4 of the GATT 1994 or alternatively of 
Article XI of the GATT 1994, by maintain ing prohibitions or restrictions on the 
importations of products imported into th e territory of India from other members; 
– the APBCL fails to act in a manner consis tent with the general principles of non-
discriminatory treatment prescribed by Article XVII of the GATT 1994, by failing to 
make the purchases and sales of wines a nd spirits solely in accordance with 
commercial considerations and by failing to afford the enterprises of the other 
contracting parties adequate opportunity to compete for participation in its purchases 
or sales. 
 The discriminatory practice of the Ta mil Nadu Marketing Corporation Limited  
 
 The Tamil Nadu Marketing Corporation Lim ited (TASMAC) appears to be granted the 
exclusive privilege of supplying by wholesale and selling by retail domestic wines and spirits and, by 
virtue of the recent Act 22 of 200 7 and Government Order No 40 of 1 July 2008, imported wines and 
spirits from outside India.  However, despite an isolated limited order, which took place in October 
2008, wholesale and retail of imported wines and spirits for general sale have been de facto  denied in 
Tamil Nadu. TASMAC purchases and sales do not app ear to be made solely in accordance with 
commercial considerations. Furthermore, the Eur opean enterprises do not seem to be provided with 
adequate opportunities to compete for participati on in TASMAC's purchases and sales, including with 
regard to brands registration, as a condition to par ticipate in TASMAC's tenders. This practice appears 
to contrast with the conditions applied for the registration of domestic brands. 
 
 The measures in question include but are not limited to: 
 
– The Tamil Nadu Prohibition Act, 1937, as amended; 
– The Tamil Nadu Liquor (Licence and Permit) Rules, 1981, as amended; 
– The Tamil Nadu Indian–made foreign spir it (supply by wholesale) Rules, 1983, as 
amended;  
– Government Order Ms. No 39, Home, Prohibition and excise (VIII), 1st July 2008; 
– Government Order Ms. No 40, Prohib ition and Excise (VIII), 1st July 2008; 
– The Tamil Nadu Liquor Retail vending (i n Shops and Bars ) Rules, 2003, as 
amended; WT/DS380/1/Add.3 
G/L/855/Add.3 G/SCM/D79/1/Add.3 
Page 4 
  
  – TASMAC practice 
 The European Communities considers that the measures are inconsistent also with 
Article XVII:1 (a) and (b) of the GATT 1994. In particular: 
 
– the TASMAC fails to act in a manner consistent with Article XVII of the 
GATT 1994, by failing to make the purchases a nd sales of wines and spirits solely in 
accordance with commercial considerations a nd by failing to afford the enterprises of 
the other contracting parties adequate opportunity to compete for participation in its 
purchases or sales. 
 The European Communities considers that these measures also nullify or impair the benefits 
accruing to the European Communities under the GATT 1994.   For each of the measures referred to in this document, the request for consultations also 
covers any amendments, replacements, extensions , implementing measures and the related measures. 
  The European Communities reserves the right  to address additional measures and claims 
under other provisions of the WTO Agreement regard ing the above matters during the course of the 
consultations.   
 The European Communities looks forward to receiving in due course a reply from India to 
this request. The European Communiti es is ready to consider with India mutually convenient dates to 
hold consultations.  
__________