MP's wine policy offers few tax sops

Wineries, if they at all come up in MP, are unlikely to be offered exemption from commercial tax, value-added tax, or other tax concessions.

To attract investment in the state, the government is chalking out a wine policy. The apex committee on investment promotion recently discussed the matter and reportedly decided to prepare a wine policy for the state. The department of agriculture has given its nod to the proposal.

An insider in the state government told Business Standard, "In a meeting where the chief minister and top officials were present, the apex committee on investment promotion sought cabinet approval to launch the wine policy in the state."

The insider also said, "The Maharashtra model will be replicated here."

Though MP is in no mood for tax concessions, Maharashtra levies no excise duty, i.e. 100 per cent remission for brewing wines for a period of 10 years; sales tax holiday; octroi holiday; special capital incentive; 100 per cent exemption to all new units for a period of 15 years; and 100 per cent stamp duty exemptions. The Maharashtra Industrial Development Corporation has set up wine parks.

"Things are at an initial stage. The tax exemption may be offered on the Maharashtra lines since policy inputs will be borrowed from Maharashtra," said the source.

Wine major Champagne Indage Ltd (Indian wine company) chief SC Chougle has visited the Ratlam area a few months back. Ratlam is the main grape-growing belt and he discussed ways for setting up the first winery in the state.

Reportedly, some farmers are growing wine-quality grapes on about 50 hectares in the Ratlam area on a trial basis.

"Facilities given under the Industrial Promotion Policy 2004 will not be offered to those setting up wineries. More importantly, as Ratlam faces a water crisis, it is not certain if the state government will make alternative arrangements for wineries and grape growers. At present some grape growers have set up a small wine unit on a pilot basis in Ratlam."

Ratlam receives an annual rainfall of 800-900 mm and the temperature hovers between 9 degree Celsius and 39 degree Celsius. The black cotton soil of Ratlam is acidic in nature and has a PH level of 6.6 to 7.8. Groundwater for irrigation is available at the depth of 200 feet.