India moves to simplify tax system

India’s central government is working towards the implementation of a consistent internal tax system on wine, with talks due to take place across 10 states.

Mumbai IndiaAt present, states set their own tariffs, which apply to domestic wine shipments from other states as well as foreign imports. This level can vary between 30% and 100%, representing just one of many variables in the country’s notoriously complex and punitive approach to wine taxation.

Foreign imports must also pay a 150% federal duty rate, although India’s minister for commerce & industry, Anand Sharma, recently offered to slash this to 40% as part of free trade agreement discussions with the European Union.

The 10 states included in these initial meetings are Maharashtra and Karnataka, which between them account for the vast majority of India’s domestic wine production, as well as Tamil Nadu, New Delhi, Goa, Madhya Pradesh, Rajasthan, Punjab, Hariyana and West Bengal.

The state of Gujarat, which currently boasts one of the fastest growing economies in India, currently operates a complete ban on alcohol sales.

Highlighting the problems caused by the current set-up, Jagdish Holkar, chairman of the Indian Grape Processing Board, told the Times of India: “The lack of uniform duty and tax structure is one of the major challenges the wine industry in the country is facing today.”

 

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