Within a day after the Maharashtra government hiked the Excise duty from 150% to 200% last week, the adjoining state of Goa announced increase in the label registration charges from an annual Rs.12000 to Rs.25000 per label. The earlier renewal charges of Rs.3000 have been escalated four-fold to Rs. 12000 a year.

The excise duty has also been increased from a nominal Rs. 20 a bulk liter (Rs.15 a standard bottle) to Rs. 50 a bulk liter (Rs. 37.50 a bottle). The increase of 250% may be small in magnitude but it indicates the shape of future for imported wines in Goa. The VAT of 20% is added further to this increase of Rs.22.50 a bottle

The importers, particularly the small and medium ones, will be severely hit by the increase. .The registration charges were already too steep, but since the renewals were reasonable, many decided to take the plunge. Now, with this hike and renewal increasing four times, it may not be possible for them even to recover the label charges in Goa. Most small importers will be forced to cut down on the labels they register, making new wines impossible to enter the Goa market.

Recently Goa excise department had also started insisting on the manufacturing license before registering the new labels. Importers find it very difficult to procure the same from their principles. Bouvet Ladubay is reportedly the only company that has been able to provide the same. The French winery is fully owned by UB which is importing it in India and the wine is being launched in Goa now. By hook or by crook, the importers have managed to get the clearances. But next year may be another story.

Surprisingly despite increase in excise duty, Maharashtra has refrained from hiking the label registration charges which are Rs.2500 per label if the number registered is over 20. Delhi has maintained them at Rs.5000 with no change in the excise duty of Rs. 150 a bottle.

How long it will take to reach Delhi, Bangalore and Kolkata is a matter of time and it has created a sense of fear and uncertainty among the importers and fine wine lovers across the nation.

Maharashtra had increased the excise duty from Rs. 150 a bottle to 150% within a week of withdrawal of ACD, announce by the Central government on July 3 this year. However, reacting negatively to the plea of the importers to bring it down, the government of Maharashtra further increased it to 200% on November 20 vide notification dated November 12, 2007, at the same time decreasing the same to 75% for higher priced whiskies.

The future of fine, imported wines has certainly dipped beyond the clouds!!

Subhash Arora
November 28, 2007

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