Thanks to the Karnataka Government implementing a tit-for-tat excise policy in the mid-course last year and after several parlays between the affected parties, Maharashtra excise department seems to be thawing and willing to relent if  Karnataka agrees to reciprocate, writes Subhash Arora

In a recent letter to the Karnataka Excise Commissioner, Mr. Yogesh Tripathi, the Commissioner of Maharashtra, Mr. I.S.Chahal has reportedly expressed their willingness to respond to the request of reduction of form K registration and removal of the additional excise duty being charged as of now. 

The biggest hurdle to out-of –state wines is the mandatory annual K-registration which costs Rs. 798,600 (almost $16,000). The Jt. Commissioner of Excise of Maharashtra has apparently confirmed that the department would reduce this amount to Rs. 250,000. Additionally, they are also willing to reduce the current special excise duty from 200% to Rs. 100 a bulk liter, expecting a similar treatment from the Karnataka counterparts.

It has also been learnt that both the excise counterparts have been on leave till yesterday and now that they are expected to be back on seat, an action would be taken soon, since Karnataka had taken a reactive action anyway. Although the ongoing elections in the country might slow down the decision making processes, both state governments are not a direct part of the election process and are well entrenched in their respected state assemblies.

The change of heart and a common agreement may not result in a total reversal of the current policy in Karnataka although it will slow down the opening of new wineries that are otherwise planning to come up-with Sula and Indage already reportedly tying up for the current year’s harvest.

The biggest plus point with the joint decision be that we will all start going back to our in-born belief that we are Indians first and Indians last and that all states are an equal part of the Republic. The wine excise policy adopted by Maharashtra has been very divisive, despite their otherwise progressive attitude towards grapes and wine making.

Karnataka’s tit-for-tat policy was opposed by most people including Karnataka consumers who felt that wines would become more expensive for them and the only beneficiary would be Grover Vineyards, the only winery of substance in the state. DelWine had however, openly supported the decision as it felt that a policy like this could only force the Maharashtra government for a re-think and bring the back into the central and national streamline. Despite, a lot of open mud slinging and whispering accusations, most people agreed that the policy was creating polarisation. Maharashtra producers have been losing money due to the extra excise required to be paid.

It is not clear from the letter exchange whether the excise duties on out-of-state wines in Maharashtra would also include imports from other countries. It stands to reason, at least in the representation to WTO that the excise policies be brought in line for domestic and imported wines though EU is not willing to budge from its stand that a total of 150% duties must only be charged on imported wines according to the WTO agreement.

We will have to wait and watch-this space which is always available to keep our viewers up-to-date.

Subhash Arora