by Subhash Arora
The government of Maharashtra, India’s third largest state, looks set to reverse its decision to increase excise duty on wine from the pre-July rate of Rs. 200 ($5/€3.40) a litre to 150% of the assessable value.
Instead, the earlier system of fixed duty per bottle will be brought back, although the duty will be increased to Rs. 300 ($7.5) a litre.
The change is expected to be announced shortly through a gazette notification after the necessary bureaucratic formalities are completed.
Rajeev Samant, the CEO of Sula Vineyards confirmed that the Excise Minister Mr Ganesh Nair signed a letter to that effect yesterday. A few importers also affirmed the same under the conditions of anonymity. This is good news for producers like Sula who were suddenly facing competition from cheap imported wines costing less than $2, as the effective duty had come down rather than going up. They had been demanding a higher excise duty for cheap wines.
The importers and producers of Maharashtra are now in an upbeat mode. The new excise regime had made quality imported wine had become unaffordable and sales had plummeted. Importers and the hotels feel they can live with the proposed increase from Rs.150 to Rs.300 a bottle. Domestic producers also feel less threatened.
