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Imported liquor to be cheaper on duty cut

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January 09, 2004 09:41 IST

The prices of leading imported spirits brands could come down by a tenth shortly. In line with its GATT commitments, the government on Thursday reduced the import duty on imported spirit from 166 per cent to 150 per cent.

Importers of foreign spirits are also likely to benefit from the removal of the four per cent special additional duty.

"Though it may sound small, when added to the 166 per cent import duty and the additional duty of up to 150 per cent, it added up to quite a lot," said Bacardi-Martini India managing director Jayant Kapoor.

As a result, Kapoor expects the prices of bottled in origin brands to come down by ten per cent. Bacardi-Martini has launched its leading BIO brands like Glenfiddich, Grants and Bombay Saphire in India.

However, others feel the impact would be marginal. "The actual impact will not be much. But it tells us about the shape of things to come," Cuttysrak director (business development) for the Indian sub-continent and the Gulf region Ramesh Mani said.

According to The Scotch Whiskey Association, the overall duty burden on imported spirit would now range between 213 per cent and 525 per cent as compared to 246 per cent and 592 per cent before the duty cuts.

"The measures will have little impact so far as better market access for us is concerned," The Scotch Whiskey Association director of international affairs Tim Jackson said.

The Scotch Whiskey Association, which has for long been demanding easier access to the Indian market, had demanded four changes in this year's Budget.

Apart from rolling down the import duty to 150 per cent and abolishing the four per cent SAD, it had also asked for a removal of the additional duty and application of all state levies at a uniform level.

"The additional duty continues to haunt us," said Mani. "We are disappointed that this duty has not been removed. The business continues to be poor as we can't match the prices of smuggled products," Kapoor added.

Expecting the government to bring down the import duty to 150 per cent, the Indian liquor industry reiterated its demand to remove all licencing restrictions in order to help it take on global competition.

"We want the government to issue fresh licences and help us expand capacities," All India Distillers Association president Devin Narang said.

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BS Corporate Bureau in New Delhi