First of all, thank you everyone for the overwhelming response to the previous entry; it wasn’t the number of people who responded that has me beaming but the fact that everyone was polite and said, ‘please’. Mums the world over would be so happy.
Now onwards to the hot topic of the moment…
So a recent article in a newspaper sparked much interest because it divulged that India was considering lowering customs duty to 40%. The EU wants 30% but hey who better at bargaining then the Indians. And yet, in spite of such a promising future, I am not entirely excited. Here’s why.
The last time duties came down, states made some super-golden hay by increasing the excise taxes. These state levies vary from state to state, ranging from 60% of CIF value+importer’s margin (yes, they tax you for being profitable) in Delhi to an inexplicably alarming ~170% in Andhra Pradesh. Not that any of these deter people from consuming that vile vicious venom called alcohol but hey, maybe it’s the local governments’ way of showing they care.
So, to cut a story short, lowering customs in fact made wines more expensive!
Delhi state has not just maintained but also reduced excise rates in the last few years and they have even managed to take the entire system online thereby not only speeding up procedures for license renewals but also for year-round stock checks and deliveries. Bravo, I guess. But back not so long ago when custom duty was 200% the same Delhi excise was a mere INR150/bottle (~$2.3 as of 27th June 2013) roughly. Today when the custom levy stands revised at 160%, Delhi excise is calculated at the higher rate of 65% of CIF value + importer’s margin. The conclusion being that the significant drop in custom levies was negated by a corresponding (and disproportionate) increase in the excise rates. What kind of a deal is that to offer? The Godfather’s handshake I’d say.
A good case in point is imported Olive oil, the extra virgin kind. Duties on this were abolished (0%) and yet the product on the shelf barely saw much price correction. Oh, sorry, wait a minute, a few months later it became more expensive!? Only the powers that be can explain how the system works.
Between importer, state, trader, and retailer there are too many points where the price can get burdened with some levy, margin, or similar. What we ideally need is a uniform taxation policy, preferably a single-point transaction that treats the country as one entity and does not allow states such frivolity.
So, to conclude, am I in favour of reducing taxes: absolutely. But do I think reducing customs from a hefty 150% to a more sensible 40% will make a tremendous difference to the final price of a wine bottle, I will prefer to wait and watch before I pop some celebratory bubbly just yet.
So, all in favour of uniform taxation get in line, huddle and stay quite lest they hear you quibble and decide to not even grant the promised 40% relief. But hey, look at the bright side, even the US of A is battling the aftermath of the Prohibition era and each states’ quirky policies regarding alcohol. The day they manage to dissociate alcohol from the governing bureau that also handles tobacco, firearms, and explosives (!?) we may have someone solid and reliable to guide us along the way.
Till then, sit back, pour yourself something crisp and enjoy the lovely flavour of the volley of exchanges between the EU and our subcontinent of a motherland.
Hi. Very informative article, particularly the excise-customs conundrum! Am looking for some information on importing wine in India for sale in Delhi/Gurgaon. Could you PLEASE (with sugar on top!) send me the spreadsheet from your last article and if your time permits, also give me some insight on how something like this can be best structured, including costs and revenues and also how the profits can be taken out of India. This is a little time sensitive, so..PLEASE!
Hi Magan,
Please send me a copy of your worksheets, We are established Canadian Vineyard owners having been in the business for 25 years. We have 120 acres of our own production with another 100 acres belonging to other members of our cartel.
We are in the process of building a state of the art winery, and are looking to establish markets in Asia, inclusive of India. Your articles are very insightful to the workings of the Indian Wine Market and the challenges and barriers to market faced by Indian Importers.
Please send the worksheets.
Thanks again,
Jesse S. Gill, CFO
ESP Global Traders Corp
NORTH AMERICA | SOUTH AMERICA | ASIA
gillj504@gmail.com
http://www.espglobaltraders.com
Sir your article is really informative , can I have the excel calculation for import of wine in India as per Delhi rules
Indian Wine market in metro’s . Yes growing. In Two tier cities seeding. NRI influence/overseas travelled personnel/Yuppie markets Growing. Issue is to gain recognition. With wine from different countries/differnt types/price tags , it boils down to affordability but quality taste.
Can I have the excel sheet for impoort of wine into India as per Maharashtra and Delhi rules?
I am interested in direct vineyards representation in India with stocking and selling route on all India basis .
Ramakrishnan Ramachandran
ramarama@hotmail.com
Dear Magan,
Thank you for the information. Please could you forward me any information on
government and state taxes and duties that are applicable for Maharashtra and Delhi.
Thank you
Sherry
Impressed by your research and insight you’ve provided to your readers. I’m interested in seeing the excel spreadsheet you’ve prepared to simplify the calculations. Please send it through.
Cheers!
Hi Magan,
Hope you are well, and still check these comments!!
Can i please request your excel calculation for the importation of wine into India.
We (Liquid Grape) have just set up a distribution company and we are looking to tackle importing wine into India head on. Our next country is Kenya (we like a challenge!!).
Loving your Blog, keep up the good work
Steve
Dear Magan,
thnak’s for you very informative article with background information. We are a German Winery
since 1626 and we take part in World of Food 2014 at Mumbai at the booth of European Union.
Accepting the offer to take part, I didn’t realise how expensive and complicated it would be.
If you have time, I would like to see you at our booth for tasting some exclusive German wines.
Maybe you can consult me, how to get the needed samples ( 2 boxes with 12 bottles each) to
the fair. I have an offer from the offical service partner to do this for roundabout 1.500 E. I
think, this is incredible expensive. The fee is only for the service, tax and customs fee is
additional.
Would be nice to hear from you, Best regards Hans-Jakob Fuchs
My spam filter had some issues so I couldnt revert in time. I hope you managed. I dont think you found an importer yet. My company is planning a wine-centric event in the coming months. Allow me get back with more details on email. And sorry again for not being able to help you with the event.
ps. The offer from your service partner was horribly out-of-line expensive!
Hi mr sommeleier
Magandeep singh wine tax fluctuaton on imported & local indian wines is vast difference can you simplify & put down the break ups of taxes charged by our excise for wines
Plus vat + service tax + sales tax & some hotel include service charge bcoz some europeans have started consuming nasik winery wines thus saying imported wines in their country is cheaper than india we cant afford india very expensive for imported wines plz help magan