The Federation of Indian Chambers of Commerce and Industry (Ficci) has urged the government to reduce domestic levies and taxes, while moving towards a lower import duty regime in alcohol beverages to provide a level-playing field to the domestic industry."
Any reduction in the prevailing import duties, without rationalisation of the domestic taxation regime for alcoholic beverage, would completely jeopardise the prospects of domestic industry," the chamber said in a release.
Apart from hampering industrial growth and employment, the move to reduce only the import duties could adversely impact the supply chain, such as the sugar industry, ancillary manufacturing and most importantly the revenue of the states, it said.
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While stating that the domestic alcohol beverage industry was heavily burdened with duties and taxes despite contributing more than Rs 20,000 crore annually to the exchequer, Ficci said the government should decontrol the industry from the plethora of rules and regulations.
"The prevalent high taxation regime, restrictions on capacity building and movement of goods from one state to the other have restricted all efforts towards attaining cost competitiveness," it said.
The chamber further pointed out the domestic alcohol industry had not been able to viably tap the export market because of the differential classification of Indian liquor in the West and in other countries and imposition of non-tariff barriers in the guise of sanitary and non-sanitary measures.