Prior to 1.4.2001, imports of beer and alcoholic liquors were exempt from additional duty of customs in lieu of State Excise Duty, while imports of wines attracted additional duty of customs of Rs. 9 per litre.
Quantitative restrictions (QRs) on imports of these items were withdrawn in 2001. Consequently, to provide level playing field to the domestic manufacturers, these items were subjected to additional duty of customs at specified rates, having regard to State Excise Duty rates leviable on like domestic items. The present rates of additional duty are as under:
| CIF Price per *case in US $ | Rate of Additional duty of customs |
| Wines and beer |
|
| < 25<o:p> | 75% |
| > 25 but < 40<o:p> | 50% or $37 per case, whichever is higher |
| > 40 | 20% or $40 per case, whichever is higher |
| Liquor |
|
| < 10<o:p> | 150% |
| > 10 but < 20<o:p> | 100% or $ 40 per case, whichever is higher |
| > 20 but < 40<o:p> | 50% or $ 53.2 per case, whichever is higher |
| > 40 | 25% or $ 53.2 per case, whichever is higher |
* Case: packing containing nine litres
This additional duty is over and above the 150% basic customs duty on spirit/liquors and 100% on wine and beer.
Some of Indian trading partners (mainly European Community and USA) have been complaining that the additional duty of customs is not ‘equivalent to an internal tax” within the meaning of GATT 1994, as the additional duty of customs exceeds the Excise Duty Rates on like products in some Indian States.
Taking into consideration all relevant factors, and after consultation with the State Governments, it has been decided to withdraw the additional duty of customs (in lieu of State Excise Duty) on imported spirit/liquor, wines and beer.
Simultaneously, basic customs duty on wines is being increased from 100% to 150%, the WTO bound rate. Spirits/liquors will continue to attract the basic customs duty of 150%.
Notification No. 81/200 7-Customs and 82/2007-Customs both dated 3rd July, 2007 have been issued in this rgard.
BSC/ST/VN/300/07