Maharashtra may cut duty on imported liquor

The Maharashtra government may reduce the special duty imposed on imported liquor four months ago.

The proposal is part of the state excise department's draft policy for special duties on imported liquor that is awaiting the state government's nod.

"Foreign-liquor importers have demanded reduction in the special duty and abolition of maximum retail price (MRP). While the MRP norm stays, we have prepared a draft policy to restructure the duty," said Excise Secretary Ramanath Jha. He said it was a matter of time before the issue was settled.

The state government had shocked the industry in July by imposing excise duty of 100 per cent on beer, 150 per cent on wine and 200 per cent on spirits. This was shortly after the Centre slashed additional Customs duty on imported spirits by 20-75 per cent.

"We used to pay Rs 200 per bulk litre of wine. For a case of 12 bottles of 750 ml each, we paid Rs 1,800 as state excise. Now, this has shot up to 150 per cent of the assessable value. This means we will have to pay Rs 1,500 state excise on a bottle of wine worth Rs 1,000", said a top executive of one of the biggest wine importers in India.

Liquor importers had met the state excise commissioner and demanded reduction in excise duty to Rs 300 per bulk litre on both wines and spirits.

In another blow to liquor imports, the government withheld imported liquor stocks saying they did not display the MRP. Since July 16, the excise department has not issued release orders for stocks that do not display the MRP. The state accounts for 35 per cent of the country's annual imports of 600,000 cases of liquor.

A state government official said the move was not aimed at discriminating against foreign liquor but providing a level-playing field to importers and Indian manufacturers. "After levying this special fee, we would like to see how it works. We will revisit the policy, if necessary," he added.

The state government has applied the same formula for assessing the maximum retail price as is applicable to Indian-made liquor ""four times the assessable value.

Assessable value is equivalent to the price of liquor at the distillery, brewery or winery, plus insurance cost and freight charges, in addition to 1 per cent of these three put together.