Desperate to counter the rise in bootlegging of imported spirits in Maharashtra, trade associations are planning to approach the state government for a cut in excise duty. Currently, imported spirits in the state command an excise duty of 100%.
The associations point out that the state is losing huge revenues as customers throng bootleggers who sell premium brands at nearly Rs 1,000 less than retail outlets.
An official with the International Spirits & Wine Association of India (ISWAI), said, ?In Delhi, where duty is comparatively less, the number of retail outlets for imported spirits has increased more than three times from 20 to 70 within a year. Also in Delhi, about 50 cases of imported spirits were sold out during July 2007, which had increased to 25,000 cases by March 2008, as an outcome of duty cut. Delhi has an excise duty of Rs 350 per 750 ml bottle. Premium brands like Johnnie Walker and Chivas Regal are available at the bootlegger for Rs 1,650-1,700, while they are priced at about Rs 2,600 in Mumbai.”
Association representatives are meeting the minister in-charge of the excise department and officials in a couple of weeks to demand a reasonable duty cut in the excise policy to be announced soon. ?What we wanted to convey to the government is that though the move of reducing the duty to 100% is good, it has little impact as bootleggers are selling at cheaper rates. At least, the government has to bring down the duty to Rs 300-350 per 750 ml bottle. If the gap between the prices is reduced, people will prefer retail shops, which will have mutual benefits for the government and industry,? he added.
The 200% excise duty that the Maharashtra government imposed on imported spirits had come down to 100% following a request from the industry. After the central government?s nod to the states to fix the levy excise at the same level of local spirits from July 2007 onwards, Maharashtra had fixed the levy to 200% on each bottle for spirits, 150% duty on imported wines and 120% on beer instead of the earlier duty of Rs 150/ per bottle. Imported spirits and wine markets in Mumbai and Delhi account for about 70 % of sales in the country.