Despite the quantitative restrictions on liquor being removed and the custom duties going down from about 270 per cent to 180 per cent in April this year, the actual imports of liquor across all categories have shown a drastic fall.
While imports of whisky have fallen by about 21 per cent to Rs 4.78 crore during April-July this year compared to Rs 6.02 crore in the same period last year, imports of both rum and gin fell 80 per cent and those of liquers and cordials fell by 97 per cent during the period.
Brandy imports also fell by 98 per cent from Rs 17.65 lakh in April-July 2001 to just Rs 27,000 in April-July 2002.
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The multinationals feel the high duty structure is the main reason behind the fall in imports.
In the last budget, the government had decreased the custom duty from about 270 per cent to 180 per cent to bring the duties in accordance with the World Trade Organisation levels.
A countervailing duty of 75 per cent was, however, imposed on the imports. Ramesh Mani, director, business development for Indian subcontinent and Gulf for Cuttysark, says the fall in imports is because the actual reduction in duties was much less than the expected reduction.
He added that these duties, coupled with the local taxes in some states, makes the products completely unattractive for the customers.