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Posted: Saturday, 28 August 2010 13:19
Maharashtra likely to Rationalize Indian Wine Tax

At a meeting held on Monday by the All India Wine Producers Association with the senior state and central government officials including the Union Agriculture Minister Mr. Sharad Pawar, the state government has agreed to reduce the K-form fees to Rs.100,000 and practically eliminate the excise duty being levied on out-of-state domestic wines.

Maharashtra currently charges Rs.650,000 annually for the mandatory license required in the shape of K-form and additional 150% excise duty on each bottle based on the manufacturing cost, for out-of-state wines putting wineries like Grover Vineyards in Karnataka and Big Banyan in Goa at a major disadvantage. DelWine has always termed this policy anti-national. Most producers in Maharashtra privately agree with this unjust stance which is even more glaring if you knew that the Grover family made Mumbai their home for decades- Kapil Grover (Partner) has even married a lady from Maharashtra

Forced by the injustice, Karnataka and Goa had increased excise duty for out-of-state wines. DelWine has been a strong supporter of the Karnataka policy despite several protests from the Karnataka consumers for whom the Maharashtra wines became more expensive overnight. The logic was simple-to put pressure on the government of Maharashtra which is the biggest wine producer with over 90% of total domestic wine production to change its anti-national policy. Karnataka was a good market for the wines produced in Maharashtra till then.

Mr. Ganesh Naik, Minister for State Excise and Secretaries of State Excise promised to reduce the K form Fee at Rs. 100,000 only and import duty at only Rs. 10 per bulk liter. However Mr. Pawar, the Union Minister said that the issue would be discussed with the Chief Minister of Karnataka to make sure they take the reciprocal steps after the notification by Maharashtra. DelWine had already published a letter written to the Karnataka government and had learnt from reliable sources that the Karnataka government was ready to reciprocated. With the intervention of the Union Minister, the reciprocal gesture should be soon a reality.

Besides Mr. Pawar and Mr. Naik, the meeting was attended by Mr. Sunil Tatkare, Minister for Finance- Maharashtra, Mr. Sameer Bhujbal, MP from Nashik, Mr. Sangitrao, Secretary- State Excise, Mr. V. Kanade, Secretary-Finance, Mr. Chahal, Commissioner- State Excise, Mr. Bhatia, Commissioner- Sales Tax, Mr. Sham Chougule, Chairman, Indian Grape Processing Board and also the troubled vintner-Indage Vintners and Jagdish Holkar, President All India Wine Producers Association

The financially troubled producers also got a reprieve with Mr. Tatkare  promising that the current action of seizing bank accounts and properties of the assesses for non deposit of VAT will be stopped forthwith and  the erring wineries will be allowed to pay the arrears in installments.

However, the long standing demand voiced by Mr Jagdish Holkar even before being nominated cum elected as the president of the association, at the first National conference held by the Indian Grape Processing Board in Delhi earlier this year, of allowing distillation of surplus wine into grape brandy at a nominal license fee was rejected by the powers that be.

Apparently, the government is concerned about the excess production of alcohol through backdoor entry and could well be under pressure from the liquor industry against the reprieve -and it may have a valid point. But it could consider each request on a case to case basis. The government must realise that excess wine in the tank currently, could already be vinegar-in any case it is wine well past its best. Under the current prevailing precarious situation where over 20 million liters of excess wine is stated to be dying un-bottled and unsold, the issue needs to be looked at by experts more closely- in the interest of the wine producers under squeeze from the recession.

The Association also tabled the legitimate demand that since grape processing units are similar to the cold storage units and a part of the post harvest management and a forward linkage for the agriculture produce, the subsidised agriculture electricity tariff for the Grape processing units should be charged. Mr. Pawar agreed to recommend this demand to Maharashtra Electricity Regulatory Commission.

The Association also requested the Hon’ble minister to take up the issue of Delhi State Excise Policies for domestic and imported wines with suggestions  in the name of  Smt. Sheila Dixit, CM, Delhi to look at resolving the existing problems. Despite being the capital, Delhi has rather restrictive policies for the Indian wine producers while the excise duties have been marked up for imported wines to levels higher than even in Maharashtra which had reduced them to saner levels last year.

Several other points related to the procedures were discussed at the meeting in Pune. Click for details.

 

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