|  The
removal of Additional Customs Duties on wines might
have brought the prices of low end wines by up to 30%,
but the consequent hike of state excise duties has made
the premium wines a lot more expensive. The Central
Government is unable to do anything to ease the situation.
In an interview with Subhash Arora, President of the
Indian Wine Academy, Mr. Ajay Dua, Secretary to the
Government of India, Department of Industrial Policy
and Promotion, Ministry of Commerce & Industry admitted
, 'the states are beyond redemption. Liquor laws are
within their preview. Much as we may not like what they
do, we are helpless. We have reduced the duties but
there is no certainty that they will not impose higher
duties.'
'But the 'decrease in duties' had made the fine wines
even more expensive than before'. The Secretary's reply
was not very convincing, 'We also have to keep in mind
issues like revenues through taxation.' Perhaps, the
governmental logic is that the premium wines are for
the upper or richer class who are not price sensitive.
'The Financial Commission has also been recommending
more and more revenues to the states, and the government
has so far been increasing its recommendations in toto',
added Mr. Dua. The Commission is mandated by the Constitution
for allocating non plan expenditures from the Center
to the States and a new one is constituted every 5 years.
Reporting directly to the President, its recommendations
have been pro-states. The term for the 12 th commission
headed by Dr. C Rangarajan expires in 2010.
But why was the customs duty increased to 150% when
beer war rightly left untouched at 100%? 'The government
thinking has been to keep the alcohol consumption low
and beer being a low alcohol product was spared the
increase.' Mr. Dua did not elaborate why wine which
is also a low alcohol (not as much as beer though) ,
but also a healthier lifestyle drink was not treated
at par with beer.
'We are at least moving towards accepting beer and
wine as lower alcohol and thus desirable among alcoholic
beverages,' said Mr. Dua adding that though the constitution
had given the mandate to the states to check alcohol
drinking, the central government had in fact increased
the beer and wine producing capacity in a big way.'
Aren't EU and USA upset with what is going on? 'They
realise that at least we are on board. They understand
the complexities of Center-State relationships. Look
at the USA. Their own state laws are so complex. So
they appreciate our stand that we did the best we could.'
What about the legislation that was supposed to be
enacted that would limit the powers of the state to
charging excise duties, no more than the imported wines.
Again, Mr. Dua was very diplomatic in fending off my
query. 'States are free to charge as much as they want.
The legislation was to be only for the potable alcohol.'
 In
the meanwhile, things seem to be in a state of limbo
both in Mumbai and Delhi where about two thirds of the
country's imported wine is consumed.
Delhi had not released any Transport Permits (TP) which
allow the delivery of alcoholic beverages to the customers,
till last week. Since yesteday, the permits have been
allowed at the old rates, except the label registration
charges of Rs. 5000 each have been validated till march
2008 only.
In Mumbai, the addition of 150% excise duty has been
made effective but no one has got the material transported
to the customer, hoping to reason out with the government
officials. It has been reported but (not verified)that
Moet Hennessy and Sula are to represent the case to
the Maharashtra Excise Commissioner on behalf of the
importers and local producers. One can only hope that
the government keeps the interest of the hapless consumer
at heart too.
In Bangalore, the status quo has already been maintained-for
now. Perhaps, next year may be another story. For the
time being the Bangalore and Delhi consumers can afford
to enjoy their glass or two of wine.
Subhash Arora
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