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 For decades, incoming air passengers could bring in a 750 mL bottle of whisky or any liquor. Later, since 1 liter was allowed, one saw the international packaging changed to 1-liter or this could have been the other way around. Those were the days when Red Label was de rigueur and Black Label and Royal Salute were luxury brands for the common man. Today even Blue Label is considered passé by many, what with single malts having gained popularity at all levels of pricing. A mere VSOP Cognac from Martell or Remy Martini was considered grand while Louis XIII was still unheard of.
While Louis XIII might be considered outrageously expensive today at around $3,000 a bottle at the Delhi Duty Free (DDF) shop in the Departure section of IGI Airport, there are a few single malts selling for over $20,000 with the most expensive bottle being $30,525-a Dalmore Cask 1964. In the Arrivals section, none of these fancy single malts are available with 25- year Glenmorangie being the top quality available at a comparatively low priced $555.
Customs confusion
The big board hanging in the Arrivals Hall indicates ‘Passengers are allowed within Duty Free Allowance Alcoholic Liquor and wines up to Two Litres’ and right below it says that the ‘Import on items in excess of the above limits will attract duties at applicable rates as notified in Customs Tariff. Curiously, right on top of the board a semi-torn paper stuck on printed figures indicates the duty-free allowance of Rs. 15,000 although using a telescope or the zoom-lens of a good camera does look like they mean Rs. 45,000.
The back of the Customs Form for incoming passengers which is not required to be filled by Indian nationals anymore unless they are carrying goods over the duty-free allowance, does not specify the value of wine or whisky and mentions only the quantity of 2 Litres. It adds to the confusion further when it says that the’ duty free allowance is not applicable to the category that also includes liquor and cigarettes’. But it explicitly indicates that the goods ‘beyond the duty-free allowance will be subject to a 36.05% customs duty’.
Clarifications sought
 If one thought that the confusion created by the Big Board and the Customs Form wasn’t enough, I asked the senior customs officers (Superintendents at the Arrival Hall) on two different occasions and got different answers. On one occasion, the officer said there was a cap of Rs. 45,000 on the value but could not explain how they were selling the at $555 (around Rs. 35,000) with the two bottles costing around Rs. 70,000 at the DDF shop, though he could have well told me that one could buy one of the two bottles at Rs. 35,000, the second one being of cheaper price so that the total did not exceed Rs. 45,000. He also could not explain whether the liquor was considered outside the duty-free allowance or a part of the allowance, meaning if one carried 2 bottles worth Rs. 45,000 would it mean that there was no more allowance available?!
On my return from Hong Kong recently, I approached and discussed with a group of officers at the same counter on Arrival. They were categorical that there was no limit on the price and the Customs laws were silent on the value of the liquor. But they stressed that the liquor or wine has to be 2 liters and not more. When specifically asked about the Dalmore Cask 1964 at $30,525 each, he said they were no concerned with the price. Period!
The sales persons in both the Departure and Arrival lounge on both occasions were uncomfortable with my question but told me that there is normally no problem when one buys the two at Departure and brings them back and if asked by the Customs simply told that there were only 2 liters of whisky. If it were that cut-and-dried one wonders why the DDF would not experiment with keeping a bottle or two of the most expensive single malts or even Louis XIII which has a definite market in Delhi and Mumbai, at the DDF Arrival.
A clarification won’t hurt anybody. And it would make more sense to have the rules clearly mentioned at the Departure as well so that a person may decide before leaving the country how much he or she is allowed to bring in duty-free legally. Some informational Board ought to be erected after the security check and before entering the duty-free area.
Delhi Excise not behind
The lacuna in the valuation of whiskies and other expensive liquor brought out an interesting lacuna in the local excise law of Delhi. I asked a prominent importer to work backwards and fix the Retail Price (MRP) if the Dalmore were to be retailed in the Delhi market with customs and excise duty according to current laws. I was surprised that the price for the whisky selling for around Rs. 20 lakhs worked out to only Rs. 3.5 million (35 lakhs) each including the customs duty, Excise and VAT at 20%. But looking at the break-up of the Cost Chart I was astounded that only Rs. 100 was being allowed per bottle towards the retailers’ margin!
 The lacuna is that in the calculations, 15% of WSP is allowed as retailers’ margin-but subject to a maximum of Rs. 100 (Rs. One hundred only). The logic known only to the Delhi Excise Department implies that the rest of the money has to be paid under the table-even in the case of cheapest wines Rs. 100 margin is impractical-what with the expensive cost of real estate alone these days! The actual margin paid to retailers varies from 10-30% or even more in some cases. Any amount less than Rs. 100,000 is incomprehensible (appx. 3%) as Retailer’s margin in this case. So the importer would have to negotiate with the retailer. In any case, he is unlikely to keep the bottle physically with the Retailer and would perhaps route it through him on paper and pay him the negotiated amount under the table, like many other payments.
Allowing 6 wines in lieu of 2 bottles of liquor
Now that I have got your attention through this foreword, let me come to the real point of this article and what is of real interest. As I have been following relentlessly for years now, it is time for the bureaucrats , politicians and any other decision makers to consider allowing 6 bottles of wine in lieu of 2 liters of liquor and if deemed fit, consider them as part of the duty-free baggage allowance.
For details and explanations, visit my earlier articles View Point: Encore for the 6-Pc Duty Free Wine Pack Plea
Order specifying Retailer's Margin
Big Board
Customs Form
Subhash Arora |