Indian liquor makers and airports are in low spirits over duty free shopping restrictions
Commerce Ministryrecommended that only one bottle per person would be allowed at duty free, while buying cigarette cartons would be prohibited.
- An IANS report states that the proposed move would result in an annual revenue loss to the tune of ₹650 crore to the airport sector.
- The move will be detrimental to the
liquorcompanies as duty free is an additional source of business for them.
In the upcoming
An IANS report states that the proposed move would result in an annual revenue loss to the tune of ₹650 crore to the airport sector.
The ISWAI represents liquor companies like Diageo – United Spirits, Pernod Ricard, Moet Hennessy, Beam Suntory, Bacardi, and many more.
Singh believes that the move will be detrimental to the liquor companies as duty free is an additional source of business for them. “The proposed move of reducing the duty free allowance from 2 Litres to 1 litre will break the back of this channel as over 75% of this channel is contributed by alcoholic beverages. Reducing 75% of this channel by 50% will break the back of this channel,” he said.
The Ministry has recommended the move to bring India’s duty free allowance at par with airports around the world. However, industry experts believe that it is unfair to compare the duty free allowance of India with other countries as India has the highest Basic Customs Duty (BCD) on alcoholic beverages at 150%.
“China is less than 30%. Companies therefore use the Duty Free channel to launch their upmarket brands. Duty Free allows potential customers to try the new brand at a lower price (due to zero duties) and then buy it at full price (with 150%) duty if they like the brand. It, therefore, plays an important role in stimulating demand in the local economy,” said Singh.
In fact, in December 2019, airport operators had called for a higher limit of duty free allowance in India. The airports body had also written recommendations to the government ahead of the budget. "Liquor allowance given in India is not at a par with liquor allowance in neighbouring countries/Asia Pacific countries," the airports body told IANS.
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