Posted: Tuesday, November 27 2007. 1:30 PM

Maharashtra Excise Virus reaches Goa

Within a day after the Maharashtra government hiked the Excise duty from 150% to 200% last week, the adjoining state of Goa announced increase in the label registration charges from an annual Rs.12000 (€210) to Rs.25000 per label. The earlier renewal charges of Rs.3000 have been escalated four-fold to Rs. 12000 a year.

The excise duty has also been increased from a nominal Rs. 20 a bulk liter (Rs.15 a standard bottle) to Rs. 50 a bulk liter (Rs. 37.50 a bottle). The increase of 250% may be small in magnitude but it indicates the shape of future for imported wines in Goa. The VAT of 20% is added further to this increase of Rs.22.50 a bottle

Ranjit Gupta, Director of Amfora Wines, a new importer, feels threatened as he will be severely hit by the increase. "We felt the registration charges were already too steep, but since the renewals were reasonable, we had decided to take the plunge. Now, with this hike and renewal increasing four times, it may not be possible for us to even recover the label charges in Goa." Like most other small importers Gupta will be forced to cut down on the labels he registers, making new wines in his portfolio impossible to enter the Goa market.

Recently Goa excise department had also started insisting on the manufacturing license before registering the new labels. Importers find it very difficult to procure the same from their principles. Bouvet Ladubay is reportedly the only company that has been able to provide the same. The French winery is fully owned by UB which is importing it in India and the wine is being launched in Goa now.

Despite increase in excise duty, Maharashtra has refrained from hiking the label registration charges which are Rs.2500 per label beyond 20. Delhi has maintained them at Rs.5000 with no change in the excise duty of Rs. 150 a bottle.

How long it will take to reach Delhi, Bangalore and Kolkata is a matter of fear among the importers and fine wine lovers across the nation.

Earlier, the central government had removed the ACD on July 3rd this year in response to a case filed by EU and the USA with the WTO, while increasing the customs duty from 100% to 150%, the maximum allowed by the WTO agreement. The states were asked by the government to deal with the excise issue any way they liked. States are empowered to do so by the constitution.

While EU withdrew its case, US has stuck to its guns and is carrying on with the case. Maharashtra had increased the excise duty from Rs. 150 a bottle to 150% within a week of withdrawal of ACD. However, in response to the plea from the importers, the government of Maharashtra further increased it to 200% on November 20 vide notification dated November 12, 2007.

Subhash Arora

One could understand these protectionist zealots, if Indian wines were drinkable at all! The fact is that, with such an unreasonable handicap to wine imports, Indian wineries will persist in producing substandard and illegal wines (very high content of pesticides, sulfites, addition of sugar, etc.). We have already seen the irreparable damage done by unrealistic duty levels to the Indian industry at large: without competition, even a primary need like industrial refrigeration - which ultimately benefits Indian agriculture and consumers - lags decades behind international standards and gets badly beaten by all Asian competition.

Tarsillo Nataloni