The talks have been going on between various interest groups including a group of European businessmen, domestic producers and the importers to come to a level which is acceptable even to WTO. The EU has complained to WTO about the irrational duties and all parties seem to be veering towards a compromise formula.
delWine has learnt from several resources that excise department is willing to bring it down to Rs.400 a bottle whereas the domestic wine producers are willing to accept a fixed amount of Rs.300 a bottle-this will thwart the attempts of cheaper wines to enter. This also means that for wines whose CIF value is under Rs.100 would end up paying, a duty of 300%, if the Rs.400 is enforced!!
Currently wines have to pay 200% excise duty. The new regime of Rs.300 would seem reasonable for mid-priced wines and upper ended wines which have become ridiculously prohibitive. In fact, it is a known fact that Delhi has now taken a lead in terms of imported wine sales by value, overtaking Mumbai.
Karnataka has already levied a special excise duty of Rs.300 a bulk liter on imported wines which translates into about Rs.280 a bottle. Delhi continues to have a fixed excise duty of Rs.150 a bottle. Haryana has no excise duty but the cost of getting the retail licenses have gone prohibitively high because of the spirits being a part of the sales too. Therefore, wine has become slightly more expensive in Haryana this year to cover the costs of the licenses.
As mentioned in delWine last month, Maharashtra is already considering eliminating/ heavily reducing the excise on out-of-state Indian wines provided Karnataka reciprocates. Since Karnataka has already agreed in principle, the new policy should be out soon (subject to the Indian bureaucratic processing time).
Meanwhile, the industry is reeling under recession. The worst seems to be over but many companies have come under an unprecedented cash crunch. The take off into the right groove may not be as fast as the importers and producers would wish. |