We don't wanna bottle up desire

The government is expected to bring down customs duty on imported liquor to 166% from 182% in the forthcoming budget in order to make duty structure WTO compatible.
It is learnt that the government is also proposing to remove 4% special additional duty (SAD) on bottled-in-origin liquor while SAD for bulk liquor is expected to continue. In a meeting held a few days back, the ministry of finance officials proposed the removal of SAD.
According to sources, the Centre is also considering transfer of responsibility of levying additional duties on imported liquor to states so as to remove ambiguity on multiple tax structure. It is learnt that instead of imposing additional duties on bottled-in-origin-liquor, each state may now be allowed to levy duties on bottled liquor which are applicable to domestic liquor companies also. Earlier, the Centre had plans to continue levying additional duty levied on bottled-in-origin liquor at the rate of 75% for spirits priced below $25 per case and 50% for liquor priced above $25 per case. This move, it is learnt, is acceptable to liquor companies, the Centre and state governments as this will remove the ambiguity of multiple taxation on bottled-in-origin-liquor.
After the proposed duty structure, a bottle of Johnnie Walker Black Label which now costs Rs 3,750, is expected to cost in the range of Rs 2,500-Rs 2,900. The reduction in customs duties will also see an inflow of vodka, brandy and liqueurs brands into the country.
Under India’s GATT Uruguay Round commitments, the tariff on imported spirits is due to be reduced to 166% as on March 1,’03 and to 150% as on March 1, ’04.
According to industry sources, while multinationals are upbeat, some domestic companies are unhappy. For instance, the UB Group is against the government’s plans to reduce customs duty on alcoholic beverages from 182% to 166% in the forthcoming Budget. UB has been approaching the government to maintain the current duty levels.
According to UB, instead of accessing bulk raw material from abroad to manufacture scotch in India, the multinationals are insisting on lowering the import duties to enable them to import large quantities of bottled-in-origin products from abroad.
The Indian liquor major feels that liquor joint ventures in India are not taking advantage of this window of opportunity to manufacture here and continue to insist on measures to lower customs duties. Scotch Whisky Association had proposed to the Indian government to eliminate additional customs duty; a conversion from current ad valorem tariff of 182% to a specific rate of Rs 100 per litre for all spirits; the elimination of either special additional duty or central sales tax; and, any state taxes, levies, fees to be applied at an identical rate to all imported and domestic spirits.
The association had also mooted a single levy or excise tax at a uniform rate to be applied to domestic and imported spirits in each state. Where any additional duties and taxes exist, they should be applied at an identical rate to both domestic and imported spirits.