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“ ;Any person drinking expensive liquor can always
afford to pay more. This is our way of taking from the rich and giving
to the poor,” said the state finance minister after presenting the
state budget on Wednesday.
The current state excise duty of 4% has been waived for
all fruit wines being produced from natural fermentation.
The excise duty on wines imported and sold in Goa will
be increased marginally from Rs 6 to Rs 8 per bulk litre. Besides, a fee
of Rs 10 is proposed to be levied per case of wine up to 9 bulk litres.
The license fee for retail sales is also being doubled
from the existing Rs.50, 000 to Rs.100, 000 for the A category retail
stores.
The hotels will also be directly affected with an increase in the annual
license fee in all categories across the board.
However, the policy has not taken diktat from the Maharashtra excise
policy of killing the goose that lays the golden egg and the minister
has proposed to make extra revenue for the state without upsetting the
proverbial apple cart.
Rajeev Samant, founder of Sula Vineyard is holding his comments on the
budget increase as it is not clear whether the import of wines means imports
from across the international borders or the Goa border. Naturally, he
will be disappointed if it means across the state, the definition chosen
by the parochial Maharashtra government, he says.
Ranjit Dhuru, CEO of Château d’Ori, the new kid on the block
for wines produced in India, also imports wines from Bordeaux and is in
the process of crossing Maharashtra borders. He is against any increase
of duties on wines. Goa is a tourist haven. By increasing duties on wines,
we are sending a wrong message to the tourists. Whether it is Indian or
imported wines, they should not take any retaliatory measures and should
increase tourism through wine. ‘They do not have wine production
of their own (Port and feni are hardly wines- not for tourists anyway),
so they should be more open about wine promotion.’
FineWinesNMore, a Mumbai based importer having a portfolio of decent
labels encompassing both ends of the price spectrum feel that the sale
of imported wines will definitely be affected in the state. ‘Goa
is a market for cheaper imports and the increase in costs of Rs.50 or
more will cut into the consumption,’ says Dharti Desai, founder
and CEO of the company. ‘We will have to go slow in Goa now and
will cut down the number of labels to be registered.’ Already stung
by high excise duties in home state, her firm is charting new vistas and
moving into the new markets as far flung as Himachal Pradesh which has
a friendly duty structure, if not a huge market.
However, the budget has brought cheers to Goa based Chateau de Banyan
which, being a state producer gets the benefit of 4% excise reduction
on the wines they produce. Said Sridhar Pongur, Executive Vice President,
Sales and Marketing with a big smile across his face to delWine in telephonic
chat from Bangalore, ‘this saving will help us put more money in
our brand.’
He is also not clear whether the increase of special fee from Rs.50 to
Rs.100 a bulk liter is on imported wines or out-of-state wines. He is
seeking clarification from the excise department as the budget is a finance
ministry exercise. ‘It will help us if the out-of-state Indian wines
are also taxed. After all Maharashtra has imposed the duty on out-of-state
wines. Karnataka is planning to do the same.’ Why Goa should not
follow suit? he wonders.
A great fan of delWine he says, ‘I start my day by opening your
website everyday.’ Well, there may not be many people as cheerful
as him after reading today’s report on the process initiated by
Maharashtra, gradually cutting into the pockets of the new breed of wine
lovers in India, importers, and hoteliers alike.
STOP PRESS: Rajeev Samant has informed delWine a
few minutes earlier that the effect on wines imported from outside the
state and sold in Goa, the rate of excise duty has been increased from
the existing Rs.6/- to Rs.8/- per bulk ltr and on imported wines outside
India the rate of import fee has been increased from the existing Rs.50/-
to Rs.100/- per bulk ltr. ‘This means the impact on domestic
wines would be only marginal,’ he says with a sigh of relief.
The effect is immediate, i.e. from 27 March, 2008
Budget in Detail:
Here are the details on the proposed increases for the wine and spirit
industry.
The excise duty on IMFL other than milk punch wines
and beer manufactured and sold in Goa has been increased from the existing
Rs 9 to Rs 15 per bulk litre.
License fee for bars: There will be area-wise licence
fee for bar-cum-restaurants having air-conditioned facilities. Currently
there is no differentiation between AC bars in rural and urban areas.
The licence fee is uniformly Rs 15000 per annum.
In ‘A’ class municipalities including Panjim municipal limits
and coastal villages, a licence fee of Rs 15,000 will be charged now while
in B class municipalities other than coastal villages, it will be Rs 10,000.
For other areas it will be Rs 5,000.
The licence fee for retail sale of IMFL and country liquor in packed
bottles as well as for bar-cum-restaurant is being slightly increased
from Rs. 6,000 to Rs 7,000 in A class municipalities and coastal villages.
In towns other than A class municipalities, it will be Rs 4,000 in place
of Rs 3,300, while in villages the licence fee will be increased from
Rs 2,000 from Rs 1,600.
The excise fee on IMFL other than beer and wine imported and sold in
Goa whose maximum retail price is Rs 1000 and above will be charged excise
duty of Rs 200 per proof litre of 750 ml. For bottles with retail price
of less than Rs 500, the excise duty will be Rs 42 and above Rs 500 it
will be retained at Rs 175.
Imported liquor: The import fee towards import of all
foreign liquor into Goa or transported from Custom stations into the State,
is proposed to be hiked. For maximum retail price upto Rs 1500 for 750
ml bottle, the fee will be Rs 300 per bulk litre and for a maximum retail
price bottle above Rs 1500 per bottle, Rs 300 will be levied.
Wine: In order to protect the interest of local industry
from increasing imports of wine which is threatening the local wine industry,
the government has proposed to increase the import fee on imported wine
from Rs 50 to Rs 100 per bulk litre.
To promote local wine industry, milk punch and wines, without using
rectified spirit for fortification and manufactured by process of fermentation
of fruits only have been exempted from payment of excise duty which is
currently four per cent per bulk litre.
The export fee is however, proposed to be increased from the existing
50 paise per bulk litre to Rs 5 on export of IMFL other than beer, wine,
milk punch whose strength is above 80 UP.
The excise duty on milk punch and wines imported and sold in Goa will
be increased from Rs 6 to Rs 8 per bulk litre. Besides, a fee of Rs 10
is proposed to be levied per case of liquor/beer/wine up to 9 bulk litres
on all franchises.
Sale in hotels: The licence fee for sale of foreign
liquor in hotels is proposed to be increased. For three-star hotels and
above or ‘A’ category as classified by Tourism Department,
the licence fee will be increased from Rs 2 lakh to Rs 2.50 lakh. For
two, three and four-star or B category hotels, the fee of Rs 60,000 is
increased to Rs 1 lakh.
An additional fee of Rs 1 lakh will be charged for hotels having casino
licence issued by the government irrespective of in which category they
are in.
Retail Sale: IMFL and country liquor on the premises
will be in 2 categories. In the first category, the licence fee will go
up from Rs 50,000 to Rs 1 lakh and in ‘B’ category, it will
be hiked from Rs 30,000 to Rs 40,000.
Wholesalers: For having licence for IMFL or country
liquor and intending to obtain additional licence for sale of foreign
liquor, the government has proposed to increase the processing fee from
Rs 10,000 to Rs 20,000.
It is also proposed to levy processing fee of Rs 20,000 for processing
the application for issuing licence for retail sale of beer and wine for
consumption in beer parlours.
Manufacturing: For setting up distillery, brewery or
winery except wineries manufacturing wine with natural fermentation, a
processing fee of Rs 10 lakh will be charged,
Wineries using natural fermentation will have to pay only Rs 25,000.
For those units applying for change of licence for manufacture of wines
from rectified spirit/extra neutral alcohol to natural fermentation, the
processing fee will be Rs 2 lakh
It makes sense for Chateau Banyan to go for a separate license for wine
manufacture by paying Rs.25,000.
Subhash Arora
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