Wine drinkers in India were cheered by the recent news that the government had (effective July 3) abolished the invidious ‘Countervailing Duty’ imposed on imported alcoholic beverages — and in turn increased the basic customs duty on wine from 100 per cent to 150 per cent, presumably to protect the fledgling domestic wine industry (and the consumer) from a flood of cheap wines.
No so bad, we thought: imported wines would become more affordable, particularly at the lower-end of the price spectrum where the earlier duties were 250 per cent, as well as in the mid-priced segments, which had been taxed at about 200 per cent.
And even though there were some mutterings questioning the government’s capitulation in advance of a complaint brought before the World Trade Organisation by France and the US in this regard, we thought the change was justified if the action led to giving consumers a wider choice — even if the drop in prices was only between Rs 50 to Rs 100 per bottle.
So why are the importers not jumping for joy?
Tags: countervailing duty, wine