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The Finance Minister completely overlooked and neglected to address the issue of high taxes on the import of wine, beer and other liquor in his annual fiscal address! There has been no reduction in the taxes, no mention anywhere in the two hour budget speech by Mr. P. Chidambaram about wine, the World Trade Organization, customs duty, countervailing duties etc.
There was a lot of buzz and hope that the countervailing duties from the Customs Tariffs Act of 150% would be withdrawn or at least reduced. No such thing has happened.
'I have been looking at all the news feeds, watching television since morning, thinking this can't be happening' says a shocked Naresh Uttamchandani, an importer of Italian, Chilean and Australian wines. 'Disappointing at best' were the remarks by a frustrated Aman Dhall, the owner of Brindco , India 's largest importer. Mr. Mukul Mehra of Global Tax Free Traders is not upset though. '' Despite the buzz about a definite reduction in the duties due to the WTO pressure, and the EU already accumulating cases of Champagne to pop, I was sure taxes will not come down'.
As a parting shot, Education Cess has been increased from 2% to 3%. This is an additional tax imposed on various taxes including duties and service tax. Since it is applied at all levels, like customs duty, CVD, this would have a cumulative impact of about 2-3% to the existing taxes on wine imports, already averaging at about 264%.'
The hotels must have heaved a sigh of relief as they were expecting to be caught in the duty net once again but can now continue to enjoy duty free benefits for yet another year. Domestic players are also pleased as they will also have a booming year ahead with a rate of growth that will outpace that of imported wines.
So the status quo will be maintained for another year for the average wine lover- if you consider the minor increase due to the additional Cess insignificant.
However, there is some good news for our friends in the hotel industry, New hotels coming up in 2, 3 and 4 star category in and around Delhi (NCR) from 2007-2010 are to get a 5-year tax holiday.
For a look at the complete budget, visit http://indiabudget.nic.in |
