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?
This is because the excise authorities of some states are playing spoilsport by subjecting imported beverages to the same levies as the domestic drop without application of mind.
In Maharashtra, the 'special fees' (a thorn by any other name ) on wines will be 150 per cent -- this will mean that while the cheaper wines become a little cheaper, prices of more expensive wines will shoot up out of sight, both at retail and in the hotels.
Delhi has yet to come out with its policy, so no new sales are happening -- so too in Bangalore, where the excise department has been sitting on pricing approvals for the past two weeks.
Fairly typical bureaucratic behaviour of our authorities, who giveth with one hand and taketh away with the other. Let's hope that good sense will prevail in some states (Goa, perhaps, and Chandigarh) and that things are done that actually benefit the consumer too, for once.