At least for people who like scotch and vodka. Wine continues to suffer though
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<http://economictimes.indiatimes.com/News/News_By_Industry/Cons_Products/Liquor/Sozzling_news_Liquor_ACD_washed_away/articleshow/2173092.cms>
NEW DELHI: The government on Tuesday scrapped the additional Customs duty (ACD)
on imported wines and spirits. The removal of the duty comes days ahead of the
meeting of a WTO panel to consider the European Union's (EU) complaint against
high Indian duties and taxes on foreign wines and spirits.
The ACD on wines ranged from 20% to 75% while for spirits it was between 25%
and 150%. The basic Customs duty on imported liquor ranges from 100% to 150%,
with the additional duty being levied above this level. Thus, the total
incidence of duty on imported liquor ranged from 177.33% to 550%, exceeding the
WTO-bound level of 150%. The bound level is the maximum Customs duty the
country can impose as per its commitments to the WTO.
While scrapping the ACD, the government has raised the basic Customs duty on
wines from 100% to 150%, the WTO-bound rate. Spirits and liquor will continue
to attract the basic Customs duty of 150%, an official release said here. Thus,
while aficionados of Scotch whisky and vodka may have cause for cheer, wine
lovers may not benefit much as the government has raised the basic Customs duty
on wine from 100% to 150%. However, even in the case of spirits, state
governments may raise local taxes.
The Centre could lose Rs 60 crore annually by removing the duty. Before April
1, 2001, the import of beer and alcoholic liquor was exempt from ACD in lieu of
state excise duty while import of wines attracted additional duty of Customs at
Rs 9 per litre. The government removed quantitative restrictions on imports of
the items in 2001 and, consequently, to provide a level playing field to the
domestic manufacturers, additional duty of Customs at specified rates, which
were intended to compensate for state excise duty rates on similar domestic
items, was introduced.
The decision to remove ACD was taken after consulting state governments on the
issue. State governments are also expected to carry out a rejig of their duty
structure to bring about parity between the levy on imported and domestic
liquor.
