Budget 2001: A Primer

The department secretary has written to all chief secretaries of the statesand Union Territories in this regard, sources said.

The secretary has also asked the state governments to consider delinking ofbeer from hard liquor and making the drink available at various outletsbesides liquor shops.

The food processing ministry has also asked the states to impose similarlabelling stipulations to imported brands as applicable to domesticcompanies. Currently, domestic companies have strict labelling regulationsin each state whereas imported brands are exempt from this stipulation.

The secretary has asked the states and Union Territories to respond to hisletter by April 1. He had earlier sent a letter in this regard on December19, 2000, which was, however, unanswered.

A senior official in the ministry said, "After the two meetings with variousliquor majors in the last few days, the secretary has assured them that hewill take up this issue with the various state governments as liquor is astate subject." Sources in the ministry said, "The secretary has not givenany guidelines rather he has asked them to come out with theirsuggestions."

In his letter to the chief secretaries he has said, "With the proposedremoval of quantitative restrictions (QRs), the question of providing alevel-playing field to domestic industry has been under consideration."

The letter says "The domestically produced liquor and wines attract customsduty and various levies such as export pass fee, import pass fee, literagefee, vend fee, assessment fee, sales tax, brand fee and transport feewhereas imported liquor and wines attract only customs duty. This gives anunfair advantage to the imported liquor and wines."

The department of food processing is of the view that the stategovernments and Union Territories may consider imposing levies and fees toimported alcohol and wines at par with domestically produced alcohol andwines as has already been done by the Delhi government.

The secretary, in his letter, has said that this is necessary to ensure alevel-playing field to domestic manufacturers and producers of alcohol andwines.

He pointed out that it has also been represented to the department thatlabelling regulations as applicable in the case of domestic alcoholicbeverages should equally apply to the imported alcoholic beverages.

He added that the department considers this demand of the industry fullyjustified. The state governments and Union Territories may, therefore,consider imposing similar labelling regulations to imported alcoholicbeverages also.

Associated Breweries and Distilleries Director Zeenia Lawyer told TheFinancial Express. "The food processing secretary has reassured us that hewill take up this issue of delinking beer and the post-QR duty structurewith the various state governments. We are hoping that he gives the stategovernments some guidelines."