Overview: Delhi excise officials have indicated that premium Scotch whisky and gin brands may see retail price reductions following a customs duty adjustment under the India-UK Comprehensive Economic and Trade Agreement. The department is currently evaluating how these tariff changes translate to consumer prices in the capital.
The Full Story
Pursuant to 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 percent. The CETA came into force on July 15. However, 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. The actual benefit to consumers will, therefore, depend on the individual brand and its revised price. Officials said some price movement could be seen after October 10 while the department examines the impact of the new tariff structure. 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 percent.
What This Means
Another factor is whether an individual product qualifies for the tariff concession under CETA. 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. At the same time, another proposal being considered in Delhi could push liquor prices in the opposite direction. The government is examining an increase in excise duty as part of changes to the capital’s excise policy.
A decision on the proposed excise-duty increase may take some more time. Delhi Excise Commissioner Ravi Jha was recently transferred to Arunachal Pradesh. 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 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.
Consumer Takeaway
For consumers, this means there is unlikely to be a uniform reduction across liquor stores after October 10. Some premium Scotch labels may become cheaper, while others may see little or no change. For now, officials said the department is examining the trade agreement, and any revision in prices will depend on the individual brand.
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