The Notification made it mandatory for importers and distributors of imported wine and spirits to pay an excise duty of 30% on the MRP of up to Rs.2000 and additional 20% on the incremental increase in the MRP. Details had been posted on delWine
The wine importers who are a fragmented lot did their best to plead with the Excise Collector, Mr. Sanjeev Ahuja, the Commissioner, Mr. R. M. Pillai and some other government officials in the finance ministry. A group of importers met the Collector even today. But the only assurance they seem to have been able to extract has been that the policy may be reviewed and modified in 3 months.
Meanwhile, a leading importer has reportedly filed the new MRP, based on the higher excise duties and it should be business as usual for him during the next couple of working days. All the importers delWine talked to; also plan to file the list by Monday. Till then their business is under suspension as the Transfer Permits (TP) can be issued only to those following the notification instructions.
The business has been at a stand-still for the imported wine industry since June 8th when the Notification was issued. A small number of orders have been filled to meet emergency situation of some hotels, based on the old MRP lists and on the assurance of reimbursement of the extra excise duty from the buyer.
The importers are equally bitter of the tightened procedures which are increasing the cost and reducing the efficiency. The investments go up as well with the higher duties which have to be paid up front before the material can be taken out.
A ray of hope exists for those fine and expensive wines that are being sold exclusively duty-free to the hotels. It appears that the department might be willing to accept the MRP based on the duty free prices, thus keeping the duty increase under check.
It is far too early to assess the potential damage that will be caused to the imported wine industry in Delhi but as an astrologer might say, ‘Saturn has entered the House of Bacchus.’
Good News expected from Mumbai
In the meantime, Mumbai may reverse gear soon. As reported in delWine earlier, Maharashtra has been considering the reduction in excise duties perhaps due to the intervention of the central government. This review was promised in March, before the general elections. Unconfirmed reports inform that the duty is being revised downwards to Rs. 300 per bottle for MRP up to Rs.900, Rs.224 for the 901-5000 and 5% for bottles costing more than Rs. 5001.This would be the most logical step as it would keep the cheap imports at bay and protect the Indian industry at the same time encouraging the fine wines to come in the market and encourage the Indian industry to improve quality faster.
Sanjay Menon of Sonarys, Mumbai confirmed that the move has been in the pipeline-but he has not seen the notification yet. Sources point out that the change may be as early as 5-6 July, that is, coming Monday. While one waits for the good news with baited breath, the VAT on alcohol has gone up from the current 20% to 25% in Maharashtra, increasing the cost of already expensive wines even more.
If the new excise policy is announced as early as it is being speculated about, Delhi would perhaps become a state with the highest excise duty in the country.
For the latest, watch out for our next edition or log on to www.indianwineacademy.com where the news is published as it happens –or at least we try to.
Subhash Arora |