NEWS
TAX OVERHAUL: BEERS WILL GET CHEAPER BUT LIQUORS MUCH DEARER IN INDIA'S WEST BENGAL
By Siulan Law Mathews DipWSET
20-10-2020
Credit: Bitan Basak/Unsplash
A new tax structure for alcoholic drinks is expected to kick in from next month in West Bengal state of India, the prices of beer in the state will reduce between 15% to 40% while prices of hard liquors are likely to go up between 10% to 20% depending on the brand.
The new prices for hard liquors will represent a steep rise of 40% to 50% from the pre-Covid level, inviting the local trade and foreign producers to lobby the state government to halt the changes.
Unlike the earlier practice of levying excise duty and sales tax on the maximum retail price, the new tax structure will levy excise duty and additional excise duty based on the ex-distillery or ex-brewery price on "bulk litre" basis.
There are 32 slabs, categorised as per the ex-manufacturer price of mild and strong drinks, to demarcate the rate of excise duty.
The new structure was supposed to be implemented from September but it was delayed following protests from liquor companies and liquor bodies.
Some tinkering with the structure in beer was done earlier this month, following which there will be a huge fall in both prices of lager and strong beer.
Director-general of Confederation of Indian Alcoholic Beverage Companies (CIABC), Vinod Giri, welcomed the fall in beer prices, but he told Times of India that they still had not agreed with the new structure for hard liquors which he thought would be detrimental for the industry and even the revenue of the state government.
The CIABC and the International Spirits and Wines Association, representing global spirits giants including Diageo and Pernod Ricard, have sent a joint representation to West Bengal’s Chief Minister Mamata Banerjee last month.
They asked for the introduction of the new tax structure to be further delayed, claiming that such a new levy system just before the festivities would prove to be counter-productive both for the government and the industry.
The West Bengal state government, like many other state governments, had imposed 30% Covid tax on all alcoholic drinks, including beer, from 7 April.
The COVID tax had led to big drop in demands of alcoholic drinks in the state, seriously denting the state government’s coffer. In mid-August, the state excise department decided to abolish the Covid tax and announced to introduce a new tax structure based on declared ex-distillery and ex-brewery prices.
(the writer can be contacted at: info@thewinechronicle.com)
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