Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: TDS :: ACCOUNTING STANDARDS :: Central Excise rule to resale the machines to a new company :: ACCOUNTING STANDARD :: VAT Audit :: articles on VAT and GST in India :: TAX RATES - GOODS TAXABLE @ 4% :: cpt :: form 3cd :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: due date for vat payment :: list of goods taxed at 4% :: ARTICLES ON INPUT TAX CREDIT IN VAT :: VAT RATES :: empanelment
 
 
« VAT (Value Added Tax) »
 Amendments in the second Schedule received from Finance Deptt.
 VAT exemption stays in tax reform bill
 Income Tax Appellate Tribunal Bangalore Banches Bangalore 'A' Bench DB Case Causelist for The Week from 22-05-2017 To 25-05-2017
 Amendments in Second schedule appended to Delhi Value Added Tax Act, 2004
 Haryana govt exempts solar devices from VAT net
 Court rules out VAT on Paradise equity transfer
 VAT gone but riddle of derivatives traded on commodity exchanges lives on
 Rule 2(L) Of Cenvat Credit Rules, 2004 Amended
 Haryana govt exempts solar equipment from VAT
 AP to push for same benefits under GST for VAT exempted goods
 Andhra Pradesh to push for same benefits under GST for VAT exempted goods

Centre pushes for uniform tax to steady liquor prices across India
June, 02nd 2008

The proposal will help the Rs45,000 crore by sales liquor industry (excluding country liquor) to adopt a uniform retail price for brands across the country

The Union government, with some prodding from liquor lobbies, is considering a uniform tax on liquor across the country, which will result in products being sold at the same retail price anywhere in India.

Thats a significant development in a country where whisky tastes the same in Cudallore in Tamil Nadu or Panipat in Haryana, but is priced differently. Thats because of varying rates of sales tax and excise duty across states. Even the road map to the common goods and services tax (or GST) that the government has been talking about exempts liquor.

Earnings from local taxes on liquor account for a significant proportion of the inflow into state treasuries.

The ministry of food processing is pushing for the creation of a committee of state finance ministers, and the Central ministers for agriculture, food processing and commerce to work towards a uniform tax regime for liquor, say officials at the Confederation of Indian Alcoholic Beverage Companies, or CIABC, an industry body that represents the interests of both domestic and foreign liquor firms.

Mint could not immediately get a confirmation from the ministry on this development over the weekend. It is also not clear what sops or incentives will be demanded by the states that will lose money if they move to a uniform tax for liq-uor because their existing levies are at a much higher level.

However, in an effort to stamp out illegal inter-state smuggling of liquor, and make transactions easier for liquor firmsfor instance, even their accounting software will need to deal with almost 30 different duty structuresIndia has been considering a uniform tax on liquor for some time.

The Planning Commission of India is also looking at ways and means of introducing a single tax regime, as it was done in the case of value added tax, or VAT, to rationalize fees and duties levied on alcoholic beverages, said Pramod Krishna, director general of CIABC, which helped the ministry of food processing draft a model excise policy based on a related study carried out by think tank National Council for Applied Economic Research.

The proposal will help the Rs45,000 crore by sales liquor industry (excluding country liquor) to adopt a uniform retail price for brands across the country. For instance, the prices of Johnnie Walker whisky or Old Monk rum in Maharashtra are higher than that they are in Punjab or Goa, but lower than in Keralaa function of the taxes and excise duty structure in these states. This has caused illegal liquor trade across states and also enormous loss of revenue for the industry as well as the states.

CIABC chairman Vijay Rekhi, who is also the chief executive of Indias largest liquor firm United Spirits Ltd, said the varied tax structure in the country has been one of the key hurdles that the sector faces on the way to a healthy growth. He admitted that the body had been lobbying for a uniform rate for some time. But, another industry executive said convincing states about the merits of a uniform tax rate would be a challenge. Since the taxes and duties on liquor are key components of revenue for states, it is not going to be an easy job for the Union government to find a solution, added this executive who didnt wish either himself or his company to be named.

Mint had reported in February that liquor firms were lobbying the Centre and states for a uniform tax regime.

Currently, state-level excise duties range between Rs25 and Rs500 per litre on Indian-made foreign liquor, or IMFL. The excise duty on wine ranges from Rs70 a litre to a high of 200% of the base price of the wine. Maharashtra imposes the highest duty of 200% of the declared cost of a bottle.

And, most states charge multiple taxes on liquor, which is an important source of revenue for them.

A uniform and rational duty structure on low-alcohol drinks such as wine and beer will not only help companies sell their products at the same price across the country, but will also lower the prices of such products (in some states), Alok Chandra of Gryphon Brands Inc., a Bangalore consultant that works with liquor firms, said in a February interview.

Though the Union government had proposed such rationalization, a similar move from the state governments was awaited, he added.

An executive at a liquor firm said more companies would be encouraged to enter the business if the tax regime were to be made uniform.

A rational and uniform duty structure will definitely attract more serious players and will contribute tremendously to the overall growth and expansion of the wine market in the country, said Abhay Kawedkar, business head at United Spirits.

In 2007, India removed a special additional import duty on foreign liquor, including wine, in keeping with its commitment to the World Trade Organization. This resulted in reduction of prices of imported liquor in India, but retail prices still continue to vary across states because of varying local tax regimes.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Privacy Policy

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions