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Wine body appeals State govts on removal of excise fees

Rahul Wadke Mumbai | Updated on October 19, 2020

President of AIWPA Jagdish Holkar.

The All India Wine Producers Association (AIWPA) has appealed to all the State governments that the excise fees from April 1 till September 31, which is levied on hotels, restaurants and bars serving wines and other alcoholic drinks should be waived off given the Covid pandemic, said newly appointed President of AIWPA, Jagdish Holkar.

In Mumbai city, a bar has to pay ₹7.5 lakh as fees per year, which is a small town of the State can be as low as Rs 60,000. Per year. Maharashtra Excise Department earns over ₹350 crore as excise fee from such outlets.

In an exclusive interview with BusinessLine, Holkar said that across the country all the wineries have huge inventory of unsold wines sitting in the vats. Unless sales happen, wineries will not be in a position to make fresh wines. This move will have a negative implication for wine sales and wineries honouring their contract with farmers growing wine grapes.

He said that out of the total wine consumption in the country about 65 per cent happens in hotels, restaurants and bars. However, the pandemic has led to a huge decline in sales, as such outlets have been shut. The Food and Beverages businesses are facing a major downturn and many have yet to pay their yearly fee for fiscal 2020-2021. Therefore, only the fee between October 1, 2020, and March 31, 2021, should be levied, Holkar said.

Holkar has chosen to lead AIWPA for the second time. He is also the chairman of Flamingo wines, Nashik and Former Chairman of Indian Grape Processing Board under the Union Ministry of Food Processing.

In deep trouble

He said that excess rains have relatively lesser impact on the vineyards. It is now pruning time in vineyards, but now that scheduled could get impacted. The wine grapes would be harvested in January for making wine. But in last seven months on account of the lockdown and the extended pandemic, the wine industry is getting into deep trouble because of the market conditions, he said.

By January 2021, about 5,000 acres of vineyards across Maharashtra, Karnataka and Madhya Pradesh will be ready for harvesting. It is expected that by early that about 25,000 tonnes of grapes will be available for crushing. Wine grapes can't be used for any other purpose.

Holkar said that still, AIMPA is hoping that there will be some uptick in States such as Maharashtra, where the bars and restaurants have started opening this month. However, they will have to pay the full year excise fee, therefore AIWPA has sought the waiver. Till date, only New Delhi government has provided such a relief.

The fee waiver will provide relief to the businesses. It also fast-track the process of reopening remaining bars and restaurants in the country. Many owners of such outlets are in dilemma whether to open bars and restaurants. If that does not happen then the whole value chain going back to the farmers will get affected, he warned.

Published on October 19, 2020

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