World Trade Organization Organisation Mondiale du Commerce Organización Mundial del Comercio

Switzerland 11:

Report by the Secretariat: III. Trade policies and practices by measure:  (2) Measures directly affecting imports: (ii) Customs valuation and clearance: Para. 25:

With regard to paragraph 25:

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  Could India elaborate on the rationale for applying maximum retail prices on certain products and particularly the regime applicable to medicaments referred to in footnote 41? Does India conduct on going reviews of the operation of this measure in order to ensure that its application does not result in de facto quantitative restrictions within the meaning of article XI?
  
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  How does India ensure that the application of the abatement does not lead to discrimination by resulting in a higher value for imported products on which additional duties are calculated [by way, for example, of reports]? Finally, could India kindly provide the list of the 143 items with HS codes and the abatement applied to each of them?
  

Reply: The MRP based levy was introduced with a view to reducing valuation disputes. Under the provisions of Standards of Weights and Measures Act, 1976 (now Legal Metrology Act 2009), as a measure of consumer protection, packaged items, inter alia, are required to indicate the maximum retail price (MRP). For medicaments, a similar requirement emanates from the provisions of the Drugs (Prices Control) Order 1995. Since the MRP is known, for certain specified items prone to valuation disputes, Government has provided that for these items the tax base will be the MRP subject, however, to certain abatements from the MRP.

This MRP based assessment is applied to import goods because the determination of the value for like domestic goods for the purpose of charging excise duty is also done on this basis. The rates of abatement are reviewed from time to time. The method and the rates of abatement are identical for imported and domestic goods. Hence, there is no discrimination against imported goods. As such, the application of MRP based assessment does not result in de facto QRs within the meaning of the GATT 1994.