Bengaluru: Alcoholic beverage manufacturers on Monday decided to seek a review of the rules proposed to review excise duty and fees as they fear replicating the European model would hurt the industry.
Chief Minister Siddaramaiah, in his budget speech in March this year, said the government would introduce an alcohol-in-beverage (AIB) based excise duty structure in April as it is a globally recognised standard for alcohol taxation. The government has proposed a uniform level of excise duty and an additional excise duty within a defined range based on an ex-factory price slab basis.
The government has moved to reduce pricing slabs to eight slabs from the existing 16 slabs.
The draft rules, notified by the state government inviting suggestions from stakeholders, defines alcohol-in-beverage (AIB) as the alcohol content/volume per litre of liquor such as brandy, whisky, gin, rum, beer, low alcoholic beverage and such other liquors consisting of or containing alcohol.
Distillers expressed their concern over the implications of the new tax structure and have decided to appeal to the government, Karnataka Distillers Association president Arun Kumar Parasa told ET.
The new draft policy talks of an increase in duties in the first five slabs and consolidation of the existing 11 slabs into three slabs and rationalization of duties in these slabs. “The distillers discussed pros and cons of the policy draft and decided to convey our suggestions to the Chief Minister and to the Resource Mobilisation Committee, headed by KP Krishnan. We are confident that the government would respond to our suggestions favorably,” he added.
The Association, Parasa said, acknowledged the spirit behind the thought process as to promote the ease of doing alcobev business. At the same time, he added, there are some concerns about hike in duties in the bottom five slabs, which the distillers hope the government would consider for moderation.
According to a distiller, who participated in the meeting, India is a developing country, and the government cannot introduce policies as in evolved societies. “When the government suddenly implements it here, it would disrupt the market. Every state has different slabs keeping in view the advantages of affordability for different sections of society.” He did not wish to be identified.
Distillers fear that the government would eventually move into a taxation regime where only one rate would exist that would be detrimental to the interests of both Indian manufacturers and consumers, while helping the deep-pocketed global alcobev companies.
Chief Minister Siddaramaiah, in his budget speech in March this year, said the government would introduce an alcohol-in-beverage (AIB) based excise duty structure in April as it is a globally recognised standard for alcohol taxation. The government has proposed a uniform level of excise duty and an additional excise duty within a defined range based on an ex-factory price slab basis.
The government has moved to reduce pricing slabs to eight slabs from the existing 16 slabs.
The draft rules, notified by the state government inviting suggestions from stakeholders, defines alcohol-in-beverage (AIB) as the alcohol content/volume per litre of liquor such as brandy, whisky, gin, rum, beer, low alcoholic beverage and such other liquors consisting of or containing alcohol.
Distillers expressed their concern over the implications of the new tax structure and have decided to appeal to the government, Karnataka Distillers Association president Arun Kumar Parasa told ET.
The new draft policy talks of an increase in duties in the first five slabs and consolidation of the existing 11 slabs into three slabs and rationalization of duties in these slabs. “The distillers discussed pros and cons of the policy draft and decided to convey our suggestions to the Chief Minister and to the Resource Mobilisation Committee, headed by KP Krishnan. We are confident that the government would respond to our suggestions favorably,” he added.
The Association, Parasa said, acknowledged the spirit behind the thought process as to promote the ease of doing alcobev business. At the same time, he added, there are some concerns about hike in duties in the bottom five slabs, which the distillers hope the government would consider for moderation.
According to a distiller, who participated in the meeting, India is a developing country, and the government cannot introduce policies as in evolved societies. “When the government suddenly implements it here, it would disrupt the market. Every state has different slabs keeping in view the advantages of affordability for different sections of society.” He did not wish to be identified.
Distillers fear that the government would eventually move into a taxation regime where only one rate would exist that would be detrimental to the interests of both Indian manufacturers and consumers, while helping the deep-pocketed global alcobev companies.
