New cess won’t raise price of imported alcohol

New Delhi: There is good news for tipplers getting shocked over this year’s budget that has proposed agriculture infrastructure and development cess (AIDC) of 100 per cent on imported alcoholic beverages.

The high levels of cess will not impact the retail price of these imported alcoholic beverages as the Centre simultaneously has reduced the custom duty on alcoholic beverages from 150 per cent to 50 per cent. The new cess eventually offsets the relief in customs duty and retail prices are set to remain steady, industry stakeholders said.

The initial news of cess sent shockwaves in the industry that already feels high level of taxation on imported alcoholic beverage unjustified. In fact, even the Europen Union has complained about the high level of taxation of scotch whiskies and has requested India to reconsider duties.

“An Agriculture Infrastructure and Development Cess (AIDC) has been proposed on import of specified goods. To ensure that imposition of cess does not lead to additional burden in most of these items on the consumer, the BCD (basic customs duty) rates has been lowered,” Finance Minister Nirmala Sitharaman said on Monday.

Alcohol remains a high revenue bringing sector for the government. It is also excluded from the Goods and Services Tax (GST) regime, and states levy excise duty on the product.

ADIC will be applicable will be applied on gold, silver, crude palm oil, petrol and diesel among other products starting Tuesday.

The re-adjustment of custom duty on imported liquor is expected to give an upper hand to India while there is talk of duty at international fora. The cess can justified on grounds that EU also extends support in the form of subsidies to their farmers, industry experts said.


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