India on the Mat Over 4G Telecomm Equipment at WTO

· US, Japan and EU Feel 10% Duty Violates IT Agreement and Tariff Binding

· India says these goods have come into Post WTO IT Agreement, No Zero Duty

· Spat in WTO to begin, the IT World to Watch India vs Developed Countries Match

· India Case Weak since WTO Panel has held that Description in IT Agreement will Prevail Over HS Code

Questions from the European Union, Japan and the United States to India regarding Indian Customs Notification No 11/2014

Communication from the European Union, Japan and the United States

The following communication, dated 1 April 2016, is being circulated at the request of the delegations of the European Union, Japan and the United States.

Notification No. 24/2005 exempted products classified under HS 8517 from customs duty, thereby implementing India’s commitments under the Information Technology Agreement (ITA). On 11 July 2014, India adopted the Customs Notification No 11/2014 that raised duties to 10% ad valorem for the following products:

(i) Soft switches and Voice over Internet Protocol (VoIP) equipment, namely, VoIP phones, media gateways, gateway controllers and session border controllers;

(ii) Optical transport equipment, combination of one or more of Packet Optical Transport Product or Switch (POTP or POTS), Optical Transport Network (OTN) products, and IP Radios;

(iii) Carrier Ethernet Switch, Packet Transport Node (PTN) products, Multiprotocol Label Switching-Transport Profile (MPLS-TP) products;

(iv) Multiple Input/Multiple Output (MIMO) and Long Term Evolution (LTE) Products.

In accordance with Customs Notification no. 12/2016, the above-listed products are classified under heading 8517. More concretely, these products appear to be classified in the First Schedule to the Customs Tariff Act of India (MFN Tariff Schedule) under tariff lines 8517 62 90 and 8517 69 90. These tariff lines are subject to a 10% MFN duty as reflected also in the 2015-2016 version of India’s MFN tariff schedule1.

However, according to India’s recently certified WTO Schedule of Concessions in HS2007 (WT/Let/1072), tariff line 8517 62 90 is bound to “zero”.

The European Union, Japan and the United States would like to ask India to clarify the following aspects:

1. Could India confirm that the four products mentioned above fall under codes 8517 62 90 or 8517 69 90? If products within the four categories subject to Customs Notification No. 11/2014 are classified under one of these two tariff lines, please specify which products are classified under each tariff line? If they are not classified under those subheadings, what are the tariff lines under which India classifies the above-listed product categories?

2. Could India confirm that the four above-listed product categories subject to Customs Notification No. 11/2014 are now subject to 10% duty rate?

3. What are India’s WTO bound tariff commitments for each of the four above-listed product categories subject to Customs Notification No. 11/2014?

4. How does India justify introducing 10% import duty for products falling under 8517 62 in light of India’s commitment pursuant of the ITA and in light of its concessions in the WTO Schedule, recently updated in HS2007 which binds the whole subheading at 0% of duty rate?

5. Should India consider that the products falling under 8517 62 are not covered by India’s commitment pursuant of the ITA, could India clearly present the reasons?

6. Should India consider that the products falling under 8517 69 are not covered by India’s commitment pursuant of the ITA, could India clearly present the reasons?