Japan—Taxes on Alcoholic Beverages
Japan—Taxes on Alcoholic Beverages
WT/DS11/AB/R; October 4, 1996, Report of the Appellate Body of the World Trade Organization
Facts:
The Japan Liquor Tax Law (Shuzeiho) taxes liquors sold in Japan based on the type of beverage. There are ten categories of beverage. Shochu is distilled from potatoes, buckwheat, or other grains. Shochu and vodka share many characteristics. However, vodka and other imported liquors fall in categories with a tax rate that is seven or eight times higher than the category for shochu. Foreign spirits account for only 8 percent of the Japanese market, whereas they account for almost 50 percent of the market in other industrialized countries. The United States, the European Union, and Canada called for consultations before the WTO. The panel held that the Japanese tax law violated GATT, and Japan appealed to the Appellate Body.
Issue:
Does the Japanese Liquor Tax Law violate the national treatment provisions of GATT Article III?
Decision:
The Japan Liquor Tax Law was found to violate the national treatment provisions of GATT Article III. The decision of the panel was upheld and Japan was requested to bring its tax law into compliance with GATT.
Reasoning:
Shochu is a “like-product” and is “directly competitive and substitutable” with other imported spirits. The imported spirits were taxed higher than the shochu.
India—Quantitative Restrictions on Imports of Agricultural, Textile, & Industrial Products WT/DS90/R (April 6, 1999)
Report of the Panel of the World Trade Organization
Facts:
India is a rapidly developing country of over 1 billion people, one-third of which are under the age of 15. Over 80 percent are of the Hindu religion. Although its per capita GDP is only about $2,500, with almost 25 percent of the population living below the poverty line, during the late 1990s its economy grew to an annual rate of about 6 percent. While its economy is largely agriculture based, it is also strong in the areas of textiles,
WT/DS11/AB/R; October 4, 1996, Report of the Appellate Body of the World Trade Organization
Facts:
The Japan Liquor Tax Law (Shuzeiho) taxes liquors sold in Japan based on the type of beverage. There are ten categories of beverage. Shochu is distilled from potatoes, buckwheat, or other grains. Shochu and vodka share many characteristics. However, vodka and other imported liquors fall in categories with a tax rate that is seven or eight times higher than the category for shochu. Foreign spirits account for only 8 percent of the Japanese market, whereas they account for almost 50 percent of the market in other industrialized countries. The United States, the European Union, and Canada called for consultations before the WTO. The panel held that the Japanese tax law violated GATT, and Japan appealed to the Appellate Body.
Issue:
Does the Japanese Liquor Tax Law violate the national treatment provisions of GATT Article III?
Decision:
The Japan Liquor Tax Law was found to violate the national treatment provisions of GATT Article III. The decision of the panel was upheld and Japan was requested to bring its tax law into compliance with GATT.
Reasoning:
Shochu is a “like-product” and is “directly competitive and substitutable” with other imported spirits. The imported spirits were taxed higher than the shochu.
India—Quantitative Restrictions on Imports of Agricultural, Textile, & Industrial Products WT/DS90/R (April 6, 1999)
Report of the Panel of the World Trade Organization
Facts:
India is a rapidly developing country of over 1 billion people, one-third of which are under the age of 15. Over 80 percent are of the Hindu religion. Although its per capita GDP is only about $2,500, with almost 25 percent of the population living below the poverty line, during the late 1990s its economy grew to an annual rate of about 6 percent. While its economy is largely agriculture based, it is also strong in the areas of textiles,