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Industry & Economy - Taxation


Premium liquor brands to attract higher tax in AP

K.V. Kurmanath

Hyderabad , April 15

THE proposed Excise Policy of the State Government could bring in some bad news for those who consume premium liquor brands.

All liquor products, bottled and packaged as per AP Excise ACT, 1968, that cost more than Rs 700 a case would be taxed at 90 per cent (up from 70 per cent).

The VAT (Valued Added Tax) Act that came into vogue from April 1 too did not touch this and put it in the Schedule VI that comprised list of goods subjected to tax at "special rates" at the point of first sale in the State. The rates did not apply to the old stocks.

Liquor companies expressed concern that the steep hike in taxes would make the prices very expensive. This would have an adverse impact on sales too.

Mr Harish Mulchandani, Managing Director of Allied Domecq Spirits and Wine (India) Private Ltd, said the new move would push the price of a bottle of Teacher's scotch whisky up to Rs 1,770 from the existing Rs 1,200.

This came at a time when the premium segment in Andhra Pradesh was growing very fast. "The new tax rate has not affected us so far. But it is soon going to have an impact on the sales," he said.

He said the company had not increased the price for the last eight years, thinking that it should not be exorbitant. "We believe in growth in volumes," he said

Mr Harish was here in connection with Teacher's Highnights, a company-promoted event here on Wednesday.

He said the company recorded a sales turnover of Rs 125 crore during 2004-05. "We are growing at 20 per cent every year," he said.

The flagship brand Teacher's contributed Rs 50 crore, selling 80,000 cases. "We are growing at 25-30 per cent in this," he said.

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