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Plea to remove excise duty on malted barley
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Bangalore
Feb. 22
The All India Breweries' Association (AIBA) has asked the Finance Ministry to remove excise duty on malted barley, the raw material for beer.
The AIBA Director, Mr Sundeep Kumar, told Business Line that the association has submitted a memorandum to the Ministry stating that double taxation on malted barley is unjustified as there is no provision of Modvat claim on ingredients for beer and the final taxation on the product is with the respective State Governments. "Because of the dual nature of the taxation regime between the two administrations, malted barley gets doubly taxed, which is not a sovereign principle," he said.
No sops
He pointed out that while pasta, rice bran, ice creams and malted milk are exempt from excise even though malted barley is used as a raw material for these products, the beer industry receives no such concessions.
"The actual process of converting barley to malt involves minimum mechanisation and the process involves only steaming, holding and affecting the internal germination of barley seeds, which is then called barley malt and as such excise duty of 16 per cent levied on malts stands patently unjustified," he said.
He said removal of duty would in fact boost the industry's contribution to the exchequer.
Currently, excise duty on malt generates about Rs 40 crore.
It would also directly benefit over 3 lakh marginal barley farmers who are located in low water-table belts.
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