karnataka: ISWAI urges Karnataka government to consider tax rationalisation on premium AlcoBev products

The International Spirits & Wines Association of India (ISWAI), the apex body of the premium AlcoBev sector, on Friday urged the Karnataka government to consider rationalisation of additional excise duty on premium products. The current taxation structure in the state has resulted in India-Made Foreign Liquor (IMFL) consumption being skewed towards the cheap segment due to the significant MRP differences between the cheap and the premium AlcoBev products where “cheaper brands are far cheaper, and the premium brands are far costlier than in other states,” it claimed.

Karnataka is one of the largest AlcoBev-consuming states in India, however, the overall excise revenue generation is not in line with the consumption and states which have lower consumption are generating comparatively higher revenues, ISWAI claimed in a statement.

“Despite favourable conditions (in the state), premium alcohol products have seen a consistent decline in consumption in the last 4-5 years. This is primarily because Karnataka has the highest tax rates,” ISWAI CEO Nita Kapoor said.

She said another pain point is the “obsolete slab structuring” which was last expanded six years ago and needs a revision