Maharashtra protects its wine industry

The government of the Indian state of Maharashtra has decided to raise the special excise duty on imported wines from the existing INR100 (US$2.26) a litre to INR200. The measure is aimed at supporting the domestic wine industry. Currently 30,000 cases of wine are imported versus domestic sales of 200,000 cases.

Imported wine just got dearer, duty raised in Maharashtra
BS Regional Bureau in Mumbai | January 11, 2006 11:45 IST
The Maharashtra government has decided to hike the special excise applicable on imported wines to protect the fledgling domestic vineyards.
Last month, the state government decided to increase the rate of special excise duty on imported wines from Rs 100 to Rs 200 per litre. The move raised quite a few eyebrows in the business circle which has been a patron for these imports. The move was seen as an attempt to protect the state’s nascent wine industry.
With a considerable increase in the sale of foreign wine and importers making a killing, the state felt that it should also get the benefit of these sales resulting in the increase in duty on imported wines, said C S Sangeet Rao, state excise commissioner
“Imported spirits are not covered by the maximum retail price regime and importers can sell at any rate they want. Even after taking into consideration customs duty and other charges, the cost for an importer could not be more than Rs 1,500-1,700 per bottle, and we know at what price it is sold at in the market. Thus by increasing the duty, the state government wants its due in profits being made by the importers,” said Rao.
Normally, imported wines are available in the country with prices starting at Rs 3,300. The market for imported wine in the country is about 30,000 cases per year. Whereas domestic wines sales is around 200,000 cases per year.
“All other imported spirits attract special excise duty of Rs 200 per litre, but lesser duty was imposed on wine imports. So, we have just brought wine on par with other imported spirits,” Rao added.

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