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Posted: Monday, 18 May 2020 09:09

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Wine Excise Policy 2020-21 for Chandigarh extended with no Tax Increase

May 16: Union Territory of Chandigarh announced the extension of its policy for 2020-21 on Saturday, with no additional taxes due to Covid-19 even though the UT of Delhi had announced on May 4, the day it allowed the selling of alcohol in Delhi when it was flummoxed with the huge lines causing it to, impose a surcharge of 70% on MRP, allowing only about 125 of the 800 shops-only State owned, pre-emptying the sale through private shops, writes Subhash Arora

In a notification issued on 16 November the Administration stated that the license fee paid already by the retail sale licensees for the period from March 23 to 31 when they could not run their retail sale liquor vends due to the lockdown would be adjusted in the licence fee to be paid for the extended period.

Extending the liquor Excise Policy till June 30, the Administration has reiterated that the Excise Policy 2020-21 will help the UT to earn a revenue of approximately Rs 680 crore against Rs 617 crore estimated for last year.

To promote beverages with low alcoholic content and boost Indian wine industry, the annual license fee has not been increased and kept at Rs 12,000. The label registration fee of wine has been reduced from Rs 10,000 per label to Rs 7,500. This compares much more favourably with the astronomical registration charges of Rs. 60,000 per label in Delhi.

Furthermore, in order to promote tourism in Chandigarh, 5-star or higher category hotels are allowed to serve liquor round the clock if they pay an increased fee from Rs. 12 lakhs to Rs15 lakhs. Presumably this fees will be applicable only when Lockdown conditions are relaxed in the UT and the hotels are opened. Punjab has already announced refund of the license fee during the period.

Chandigarh is a Union Territory like the Indian Capital. But it has very progressive policies for the past few years-perhaps the beginning was made in 2007 when delWine had focused on the policy and wine marketing in Chandigarh, which was designed to avoid smuggling from the neighbouring States like Punjab, Haryana and Himachal Pradesh. Unlike Delhi they have been very regular in announcing their policy every year in March, even this year. Thus, the current circular is in fact a mere extension of that policy.

For a few of the Articles about Chandigarh, please visit:

Wine Label Registration for Chandigarh reduced to Rs.7500

Unlikely lower drinking age in Chandigarh Policy 2020-21

Excise: Chandigarh Policy favourable for Wine and Beer

Delhi on the other hand, presents a rather gloomy picture, so far as the wine and alcohol excise policy is concerned. Over the years, it had shown some progressive traits by allowed the opening of wine and liquor stores in the shopping malls where women could buy wine and spirit of their choice without standing in lines at the thekkas and feeling embarrassed. They could also buy in the recent years in about 150 department stores in various localities. Now the shops in the Malls have been closed and so are the department stores.

Incidentally, Haryana’s new Policy for wholesale distribution has been postponed due to Lockdown imposed before the policy could be formalised though Retail Shops were allotted based on the highest bids. Haryana converted last year to Oligopoly after 2 years of experimentation with monopoly. This year, the State was reportedly keen to make it more open to various players.

Strange Case of Delhi Excise applicable to Department Stores and L1 Licensees

L-12/L12F Licenses for the Department Stores were applicable till 31.3.2020. But the Delhi Government took the unilateral decision to cancel the Licenses on 19 December, 2019 for alleged violation of the rules. The stakeholders had gone to High Court which had given a Stay Order against the impugned order and directed the 113 stores to ensure that they complied with the terms and conditions of the contract.

The shops were allowed to open in January, 2020 and were functioning smoothly till the lockdown was announced. It is a moot point whether the authorities would refund the unutilized portion of the annual fee for the period in which the order pervaded and for the 24-31 March period of Lockdown.

But the court order has now become infructuous because the new annual license for 2020-21 is unlikely to be renewed unless there is a strong lobbying by department stores to convince them otherwise or alternatively, they have to wait at least till the next Assembly elections due in 2025.

In the meanwhile, although there has been a lockdown this year so far after March 24, the L1/L1F Licensees were asked to deposit pro-rata license fees till June 2020 if they wanted to renew their license during this extension. Till date, only the big corporates like Diageo, Pernod Ricard and Moet Hennessey-the big liquor sellers have managed to get the labels registered after depositing the license fee for the extended period, till June 30.

Punjab and Chandigarh are progressive and equitable enough to have allowed the refund for April 2020.

Confusion persists

There has been a lot of confusion about marketing of wine and liquor throughout India. A few States have resisted and not allowed the shops to be opened despite losing the excise revenues heavily . Tamil Nadu had opened up the sales but High Court had disallowed the Sales on grounds of violations of the coronavirus guidelines However Supreme Court stayed the Madras High Court order for closure of state-run liquor outlets on last Friday, 16 May. Tamil Nadu should start allowing sales soon. In Maharashtra, the government allowed home delivery but BMC has apparently blocked the re-opening as on Sunday.

The Chapter in the book of Lockdown during Corona Virus in India has lot of amusing stories but dry throats for the alcohol consumers and with the situation being fluid and changing rapidly every day. Media is having a good time with lots of content provided by various States. This might continue to outlast the Lockdown which was again extended till 31 May all across India from today.

Corona Tax at 70% MRP

Subhash Arora

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