Winemakers slam inter-state levies

PUNE: The state's wine producers have strongly criticised the tendency of the state governments to levy high duties on wines coming from other 
states under the name of protecting the local wine producers.

Talking to the media at the Mahawine 2009 conference organised by the Confederation of Indian Industry (CII) here on Friday, Abhay Kevadkar, business head for wines and chief wine maker at the UB group, said the practice of taxing wines from other states can bring down sales for all wine producers irrespective of where they are.

"The Maharashtra government has waived state excise duty on wine for ten years but levied 150 per cent duty on wines coming from other states. In retaliation, Karnataka has levied 300 per cent duty on wines going into that state. This has led to a lose-lose situation as wine producers on both states have suffered in terms of lost sales," Kevadkar said. About 20 per cent of the country's wine market is in Karnataka and it is a serious problem for wine producers in Maharashtra, he added. Kevadkar stressed the need to follow a uniform, national duty structure based on understanding between the states.

Kevadkar said that the Indian Wine Producers' Association has challenged the order of the Aurangabad bench of the Bombay high court asking wine producers to pay the duty waived by the state as the court held that the producers are not passing on the benefit of duty waiver to the customers. "We have not charged the duty to the customers at all, so there is no question of passing on the duty waiver benefit," he added.

Earlier, Pramod Chaudhari, vice-chairman of the Maharashtra Council of the CII, said there are wider issues on a national level that have to be addressed to, if the wine sector is to be encouraged. He said, in addition to the issue of excise duties, the country's laws governing advertising need to be reviewed as well. "Wine is bundled under alcoholic drinks and, as such, cannot be advertised, though it is well known that it is a health drink much benign as compared with spirits."