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earlier a flat duty of Rs.200 bulk liter was charged
on imported wines (translating into Rs.1800 per case
of 12 bottles of .750 litres) the latest ruling implies
a whopping 150% on the assessed value of the bottle
which is calculated at the CIF value +1%. The following
table explains the impact of the new policy on a per
case basis and the percentage basis. All the amounts
are in INR .
Let us take the example of a Brunello which could have
been costing $200 per case. Earlier the special duty
was Rs. 150 a bottle. This would translate into Rs.
1060. Now, there is an addition of Rs. 910 per bottle.
Add to this, the increase of basic duty from 100%to
150%. And do not forget the VAT of 20% on the whole
amount and you are sure to get into depression-even
if you are not an ardent love of Brunello, an Italian
gift to wine lovers throughout the world from Tuscany.
The above differential will translate into the end
price being affected even more in the case of spirits
which attract a Special Fee of 200% of the Assessable
Value.
The importers’ request is to continue with a
flat system of Special Fee per bulk litre as was prevailing
before. Speaking privately to delWine on conditions
of anonymity, most of them have expressed their willingness
to go with higher amounts per bulk liter (this might
adversely affect cheaper wines though-editor).
Biggest to be affected directly and immediately are
the hotels that have been paying no customs duty and
so an increase of customs duty does not affect them
accept reducing their entitlement-an indirect effect.
‘ With most of the brands in the Wine Menu being
priced prohibitively compared to international standards,
guests would stay away from consuming wines and spirits,
very badly affecting the revenue of Hotels and Restaurants’,
claim the petitioners.
‘ International Travelers, who constitute bulk
of the guests staying in five star hotels, would harbour
an impression, based on the Wine Menu prices, that Mumbai
hotels are very pricey, which is highly detrimental
to the interest of the State in general, and the Tourism
Industry in particular’ , adds the representation.
Another issue taken up by the importers is the Assessment
value. In the case of Indian manufacturers, the cost
of manufacture is taken as the assessment value. Whereas
in the case of imports, the landed value is deemed to
be taken as the benchmark, which includes the producer’s
profits and all the variable costs of transportation
and insurance etc.
The issue of MRP (max. retail price) and imposition
of Rs.2.5 lakhs of additional charge for importers of
imported goods to get the license endorsements are the
other sore points that ought to be resolved. Otherwise
the additional costs will have to be passed on to the
consumer, thus resulting in fatalistic losses in sales
and profits.
While the legality of the notification in terms
of assessment value being unfair may be a matter of
debate and challenged in the courts later, if bigwigs
decide to take such action, the course of action taken
by the government does seem to be high handed and unfair.
Championing the cause of wine lovers, delWine fully
supports the representation made by the importers with
the hope that the officials keep the interest of the
consumer at heart too. Budgets and revenues are a matter
of prime concern but you also do not kill the goose
that lays the golden eggs, as it were-editor.
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