India

India Confirms Duty Concessions for Bulk Scotch Amid Classification Debate

By TNN

NEW DELHI – Commerce Secretary Rajesh Agrawal told industry representatives on Monday that India will uphold its commitment under the trade agreement with the United Kingdom and that duty concessions for bulk Scotch imports will not be affected. The dispute centers on bulk Scotch, which makes up 80% of whisky shipments from the UK. Under the agreement, effective 15 July, customs duty on bulk Scotch has been cut to 75% and is to be reduced to 40% over ten years. Bulk imports are essential for blending and bottling whisky in India.

The Directorate of Revenue Intelligence (DRI) has questioned the product classification of bulk whisky, noting that the duty concession applies to tariff line 220830 for products imported in containers larger than two litres. Companies have been using three HSN codes – 22083092, 22083093 and 22083099 – for bulk Scotch. DRI is reviewing whether the imports should be classified under heading 2208, which covers spirits and whisky, or under heading 2106, which relates to food preparations not included elsewhere. Industry argues that classification under heading 2106 would eliminate the duty concession.

The industry has demanded that the tariff concession apply to both finished whisky and bulk Scotch, otherwise Indian companies would suffer. Government officials said the commerce and revenue departments would discuss the issue and address industry concerns in the coming weeks.

“The ministry of commerce and industry today assured the Indian Alcobev industry that the ambiguity surrounding the current HSN code classification for bulk Scotch imports will soon be resolved amicably. The aim is to resolve the situation fully in due time and to maintain business continuity for companies in the sector,” the Confederation of Indian Alcoholic Beverage Companies said after a meeting with Secretary Agrawal.