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 While the neighbouring Haryana has always been prompt in announcing its policy for the proceeding year applicable on April 1, a month early in March without exception, Delhi government seems to have been dithering during the last few years in announcing the new policy and keeps on deferring up to 6 months with ad-hoc policy in the interim. Last year the new policy came into effect in October- 6 months late!
Here is fly in the ointment. After collecting the charges for 6 months on a pro-rata basis, when the new policy is effective, one has to deposit all the charges again for full one year. If the license fee is Rs. 15 lakhs for one year- and Rs. 7 lakhs have been deposited for 6 months on pro-rata basis, the license according to the new policy will be issued only after the amount for the FULL year. Ditto for label registration! This means the government is charging 50% above the announced license fee and label registration.
If the bookies focused on the odds for the extension date and the period of extension, they would perhaps generate more business than the wine sales, which is hurting due to the government’s laxity and lack of application. The delay could be palatable if there were provisions of reducing the amount paid on the annual license fee and if the label registration fees were adjusted out of the amount payable during the balance of the year. But it is not so.
Belling the cat
Our sources inform delWine that the producers have made representations to the excise department but with no response. The Illegality of the issue has crossed their minds. They all concur in private that it is patently illegal but no one is willing to face ‘enmity with the crocodile while swimming in the water’ and reluctantly pay the charges for the sake of continuity of business.
It is intriguing to read the last para of the Circular dated 27-7-2017
sent to all the stakeholders and attached
herewith. It reads: However, any person holding such non-renewable
license shall not be under any obligations to accept such offer to extend
his license. It is not clear if they really expect the distributor to
shut shop for the interim period by not paying the fee or if it is a ploy
to keep the lawyers at bay but it is unlikely that this could act as a
detriment for someone wanting to check out the legality of the current
norm of ad-hoc extensions.
Our reliable sources inform us that a case was in fact already filed last year against this policy through a possible front man. The hearings are at an advanced stage in the High Court and the judgement is expected soon. Stay tuned for further details.
Drink Indian by the bottle-buy by the case
Another anomaly in the Delhi Excise Policy is the seeming discrimination against Indian wines (Hail ‘Make in India’!) where the licensee outlet-retailer or restaurateur, club or hotel, must order Indian wines by the case of 9 liters. Same is not the case with imported wines or anywhere else in India, according to an importer who distributes imported as well as Indian wines in Delhi and other States.
Many outlets find it impractical to order a case, especially for the super premium wines costing over Rs. 1200 a bottle and thus refrain from buying Indian wines and buy smaller lot of an imported equivalent even if slightly more expensive. If an outlet wants to sample a bottle of new Indian wine with the customer, he is obliged to buy 12 bottles- which is not feasible for the producer as well as the outlet. Particularly affected are the small, boutique wineries with limited budgets. There is again no provision of sampling in the restaurants legally.
Genesis of the problem goes back to about 10-15 years according to a source, when the Indian liquor was the most prevalent alcohol sold. The retail outlets would order by the bottle- sometimes even 3 or less (wine was not much prevalent then). The producers who were hassled by the restaurants ordering even as low as one bottle, represented to the government against the practice. The Policy thus made it obligatory for the Indian alcoholic products (including wine –which is lumped in the same category with other alcoholic products).
Ironically, sale of premium quality wines is impacted negatively even more than the regular wines. There was apparently a suggestion made a few years ago that the policy should allow Indian wines of better quality (say, Rs. 1000 a bottle and above) to be sold by the bottle. But this has been obviously turned down as the current policy (1916-17) insists on the sale by the case; generally of 9 liters (375 mL bottles must be in 24 bottle-cases).
License Cost for Indian wines
The Delhi Excise Policy also appears to be skewed against small domestic producers. With the annual license fee of Rs. 2 lakhs per label (max Rs. 14 lakhs for sales during regular office hours), smaller producers see a government created barrier-with no practical possibility to enter Delhi market. In case of an importer, one could register through a distributor and pay him the pre-negotiated charges. But currently no such facility is available apparently for the Indian producers.
In conclusion there is one suggestion to the decision makers-Put yourselves in the shoes of the importers and producers as if it was your business-and then take a decision. Everyone will welcome it! Jai Ho!!
For detailed charges click HERE
Subhash Arora
CIRCULAR OF EXTENSION DATE
27 7-17
Excise Charges 2015-16 and 2016-17 |