New Delhi: Some premium Scotch whisky brands may become 10-15 per cent cheaper in Delhi after October 10, with the Excise Department examining the impact of the India-UK trade agreement on liquor prices, officials told NDTV.
The reduction, however, is unlikely to apply to every label. They are also examining how the lower customs duty should be reflected in prices in the capital. But the sharp cut in customs duty does not mean an equally sharp fall in the price of a bottle. The retail price of imported liquor also includes state excise duty, taxes, margins, and other costs. Another factor is whether an individual product qualifies for the tariff concession under CETA. At the same time, another proposal being considered in Delhi could push liquor prices in the opposite direction. There has, however, been no fresh increase in excise duty so far. If approved, a higher state levy could push up liquor prices and, for some imported brands, offset part of the benefit from lower customs duty. A decision on the proposed excise-duty increase may take some more time. Delhi Excise Commissioner Ravi Jha was recently transferred to Arunachal Pradesh. The change at the top of the department could mean the two developments affecting liquor prices do not happen at the same time. Some qualifying UK-origin Scotch brands could first get the benefit of the customs-duty cut, while any increase in Delhi’s excise levy may come later.
The actual benefit to consumers will, therefore, depend on the individual brand and its revised price. Under the trade agreement, India has cut customs duty on qualifying British whisky and gin from 150 per cent to 75 per cent. The tariff is set to fall further in phases, eventually coming down to 40 per cent. The CETA came into force on July 15.
Delhi’s excise officials said the department is studying provisions of the India-UK Comprehensive Economic and Trade Agreement, or CETA. Prices will have to be examined brand by brand, officials said. This is one reason the department is examining the impact separately for individual brands, officials said. The government is examining an increase in excise duty as part of changes to the capital’s excise policy, officials said. Officials told NDTV that the department is likely to wait for a new Excise Commissioner to take charge before the proposal is taken forward.
The lower duty is linked to rules governing the origin of a product. This means a British or international brand name alone does not automatically make a bottle eligible for the benefit. Some liquor labels are imported as finished products, while others may be bottled or manufactured in India. Some premium Scotch labels may become cheaper, while others may see little or no change.
Officials said some price movement could be seen after October 10 while the department examines the impact of the new tariff structure. For consumers, this means there is unlikely to be a uniform reduction across liquor stores after October 10.
For now, officials said the department is examining the trade agreement, and any revision in prices will depend on the individual brand.
Delhi has not announced any across-the-board price cut. A similar exercise is already underway in neighbouring Uttar Pradesh, where prices of several UK-origin liquor brands are set to fall from October 10. The reduction for some premium labels there is expected to be between 5 and 15 per cent.
