Maharashtra government appears to have realised the arbitrariness of its decision to increase the excise duty on wine from the Pre-July rate of Rs. 200 ($5) a liter to 150% on the assessable value. Reliable sources confirm that a fixed and yet increased excise duty of Rs. 300 ($7.5) a litre will be announced shortly through a gazette notification.

Confirming this during a telephonic conversation from Maharashtra, Rajeev Samant, the CEO of Sula Vineyards confirmed that the Excise Minister Mr. Ganesh Nair signed the letter to the effect today. A few importers also affirmed the same under the conditions of anonymity.

Rumours have been going around for sometime to the effect. The latest has been that the central government has given the state government the target of November 22 to roll down the duties.

The necessary papers need to be signed by various people in the excise office to make the change applicable - through a gazette notification.

The importers and producers of Maharashtra are equally in a very upbeat mode. Foreign wines had become unaffordable in Maharashtra. The duties had also come down on cheap wines costing less than $2 a bootle, making them less expensive. Hotels there have been finding the foreign wines a lot more expensive with the newly imposed excise duty and the wine business had come practically to a standstill with hotels postponing their purchases.

The estimates for this year's consumption would be lowered due to sales lost in Maharashtra during July-November.

Subhash Arora
November 15, 2007