NEW DELHI:
Tough times seem to be over for wine and beer manufacturers. The department of food processing industry is mooting the proposal of promoting consumption of wine and beer at the expense of hard liquor and has suggested assigning priority status to wine industry as has been done in the case of horticulture based industry.

FPI is also open to the idea of advertising for promoting consumption of wine considering its health value over hard liquor and permitting vending of wine through super bazaars and drug stores on the basis of a license from health department to increase availability of wines.

In an another move to boost the sector, the FPI has asked the government to liberalise licensing policy so as to create economically viable capacities for domestic manufacturers to face global competition. In addition to this, it has also proposed levy of higher import duty on all imported wines to avoid dumping.

Despite liquor being a state subject, the department is also of the view that the central government should look after wine sector for all purposes like licensing, taxation etc.

On the issue of countervailing duty, the department has suggested that CVD on liquor (per nine litre case) priced at $16.49 should be 200 per cent; between $16.5-23.99 should be 150 per cent, between $24-38.99 should be 100 per cent, and 39 and above should be 75 per cent.

FPI is of the view that CVD on wines should be 50-70 per cent of MRP. In case of beer, it stated that imported beers should be subjected to levies over and above the custom duty as applicable on domestic beer.

Calling current duties on liquor and wine unattractive, FPI said with total cumulative duties on imported liquor, after adding additional duties at 706 per cent and 420 per cent on cheaper variety of wines, the import of liquors has become unviable.

It said not only the tourism industry has been hard hit by the additional duty, it has become highly unaffordable for the common consumer to buy the imported stuff. This would lead to the government not earning the desired revenue and it would prompt smuggling and inflow of spurious liquor.

In order to form guidelines for the liquor sector, the department has suggested setting up a working group to draft comprehensive guidelines on the aspects of the alcoholic beverages including levies which could adopted by the state governments as was done for the sales tax.

The working group would study the excise policies, duties structure prevalent in different states and also monitor imports and export of alcoholic beverages and submit recommendations on the CVD rates.