The Hindu Business Line : Liquor cos seek rationalisation of duty structure

New Delhi, June 17 International Spirits and Wines Association of India (ISWAI) has said the recent Delhi Government’s notification of a 25-30 per cent hike on imported liquor will increase the grey market share in North India.

Companies, which are already reeling under economic slowdown, are seeking rationalisation of duty structure.

“It is a matter of concern for us as Delhi is a crucial market for all liquor majors. We believe that irrational policies are costing the exchequer over Rs 2,000 crore,” said Mr Amrit Kiran Singh, Chairman, ISWAI.

He said the liquor association is also holding parleys with senior Government officials to rationalise the tax structures.

The Delhi Government had recently changed the local taxation structure on imported brand to 30 per cent of the MRP from a flat fee of Rs 300 a bottle earlier. This means that prices of liquor are likely to go up by 25-30 per cent.

Mr Singh said the new taxation regime will replace and nullify the withdrawal of additional customs by the Centre in July 2007. “In pre-July 2007 phase, excise on imported liquor comprised vend fee plus additional customs duty of about 150 per cent”.

He also noted that the grey market will thrive as the price differential between legitimate and grey market will be nearly Rs 1000.

“Imported whiskies like Jack Daniel’s, Chivas Regal and Johnnie Walker Black that are presently priced at about Rs 2,200-2,300 a 750 ml are expected to move up to the Rs 2,700-2,800 price band, which would expand the price difference to almost Rs 1,000 a bottle between the legitimate and grey markets,” he said.

More Stories on : Breweries | Excise and Customs | Other States

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page