INDIA – MEASURES AFFECTING THE IMPORTATION AND SALE OF WINES AND SPIRITS FROM THE EUROPEAN COMMUNITIES
Document: Request for the Establishment of a Panel by the European Communities
Date: 27 March 2007
Document codes: WT/DS352/4
Complainant: EU
Respondent: India
Third parties: Australia, Chile, Japan, U.S.
Dispute stage: Panel
Agreements cited: Art. II:1, II:2  GATT 1994

INDIA – MEASURES AFFECTING THE IMPORTATION AND SALE
OF WINES AND SPIRITS FROM THE EUROPEAN COMMUNITIES

Request for the Establishment of a Panel by the European Communities

 The following communication, dated 23 March 2007, from the delegation of the European
Communities to the Chairman of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of
the DSU.

 The European Communities hereby requests the establishment of a panel pursuant to
Articles 4.7 and 6 of the Understanding on Rules and Procedures Governing the Settlement of
Disputes ("DSU") and Article XXIII of the General Agreement on Tariffs and Trade 1994
("GATT 1994").

 This request concerns measures that adversely affect exports of wines and spirits (codes 2204,
2205, 2206 and 2208 of the Harmonised System) from the European Communities to India.
Specifically, this request concerns the following measures:

 – Sections 2 and 3, and Schedule 1, of the1975 Customs Tariff Act;

 – Customs Notification No. 5/2004 of 8 January 2004 on Basic Customs Duty applied
to spirits (code 2208 of the Harmonised System);

 – Customs Notification No. 20/1997 of 1 March 1997 on Basic Customs Duty applied
to wines (codes 2204, 2205 and 2206 of the Harmonised System);

 – Customs Notification No. 32/2003 of 1 March 2003 on Additional Duty applied to
wines and spirits (codes 2204, 2205, 2206 and 2208 of the Harmonised System); and

 – Customs Notification No. 19/2006 of 1 March 2006 (on Extra Additional Duty
applied to, inter alia, codes 2204, 2205, 2206 and 2208 of the Harmonised System).

 For each of the measures referred to above, this request also covers any amendments,
replacements, extensions, implementing measures or other related measures.

 Under Section 2 and Schedule 1 of the 1975 Customs Tariff Act, India applies a Basic
Customs Duty to imported wines and spirits (codes 2204, 2205, 2206 and 2208 of the Harmonised
System). The Basic Customs Duty is applied pursuant to Customs Notification No. 20/1997 of
1 March 1997 to wines (codes 2204, 2205 and 2206) at a level of 100% ad valorem and pursuant to
Customs Notification No. 5/2004 of 8 January 2 004 to spirits (code 2208) at a level of 150%
ad valorem. Under Section 3 and Schedule 1 of the 1975 Customs Tariff Act, India also applies an

Additional Duty and an Extra Additional Duty to im ported wines and spirits. The Additional Duty is
applied pursuant to Customs Notification No. 32/20 03 of 1 March 2003 to wines at levels ranging
from 20% to 75% (depending on the customs value of the wines imported), and to spirits at levels
from 25% to 150% (depending on the customs value of the spirits imported). The Additional Duty is
applied to the aggregate of customs value and B asic Customs Duty. The Extra Additional Duty is
applied pursuant to Customs Notific ation No. 19/2006 of 1 March 2006 to wines and spirits at a level
of 4% ad valorem. The Extra Additional Duty is applied to the aggregate of customs value, Basic
Customs Duty and Additional Duty. The aggregate duty level resulting from the application of the
Basic Customs Duty, the Additional Duty and the Extra Additional Duty ranges from 177.33% to
264% for imported wines and from 252.22% to 550% for imported spirits. Those aggregate duty
levels exceed the bound level of 150% ad valorem for wines and spirits set forth in the WTO tariff
schedule of India.

 These measures nullify or impair the European Communities benefits in respect of India's
obligations under the GATT 1994. In particular, Indi a has acted inconsistently with Article II:1(a)
and (b), read in conjunction with Article III: 2 of the GATT 1994, by failing to accord to the
commerce of another Member treatment no less favourab le than that provided for in India's tariff
schedule annexed to the WTO Agreement. Indi a has failed to exempt products, which are the
products of territories of another Member, on their importation into India's territory, from ordinary
customs duties in excess of those set forth and provided in India's schedule.

 Further details on these measures and on the ma nner in which they nullify or impair the
European Communities benefits in respect of I ndia's obligations under the GATT 1994 may be found
in the document entitled "Report to the Trade Barri ers Regulation Committee, Examination Procedure
Concerning an Obstacle to Trade, within the Meaning of Council Regulation (EC) No 3286/94,
Consisting of Trade Practices Maintained by India Affecting Trade in Wines and Spirits, Complaint
Submitted by the European Spirits Organisation (C EPS) and the Comité Européen des Enterprises
Vins (CEEV)" which is available at http://ec.europa.eu/trade/issues/respectrules/tbr/cases/ind_alc.htm

 On 20 November 2006, the European Communities requested consultations with India with a
view to reaching a mutually satisfactory solution of the matter. The request was circulated in
document WT/DS352/1 dated 23 November 2006. The consultations were held on 20 and
21 December 2006 in New Delhi on the above-men tioned measures. They have not led to a
satisfactory resolution of the matter.

 Therefore, the European Communities respectfully requests that a panel be established, with
standard terms of reference under Ar ticle 7 paragraph 1 of the DSU, to consider the above complaint
with a view to finding that India's measures nullify or impair the EC's benefits in respect of India's
obligations under Article II:1(a) and (b), read in conjunction with Article III:2, of the GATT 1994.

 The European Communities asks that a special meeting of the Dispute Settlement Body be
convened on Wednesday 11 April 2007 and that this request for the establishment of a panel be placed
on the agenda of that meeting.