30 , September , 2022
In a recent development, the alcoholic beverages industry has sought Delhi government’s intervention for the disposal of leftover stock of around 70 lakh unsold liquor bottles – a situation caused by the excise policy switchover.
In fact, the Confederation of Indian Alcoholic Beverage Companies (CIABC) has written to the excise department of Delhi government seeking its urgent attention for the disposal of the unsold stocks.
Delhi government had on November 17, 2021 brought Excise Policy 2021-22, which ended the near absolute monopoly of the government in sale of liquor, opening the tightly guarded revenue stream to private players, with the city for a brief period seeing opening of fancier liquor shops. This policy was withdrawn in July after the Lieutenant Governor recommended a CBI probe in its implementation accusing government of committing irregularities. The old excise Policy, operational before November 17, 2021, was brought back from September 1.
“The matter of stocks leftover in L1 warehouses of companies on 17 November 2021 when the policy changed is yet to be resolved. Excise department had allowed companies to transfer this stock to their new L1 licensees but permission to sell it was not granted despite such assurance,” said Vinod Giri, Director General CIABC.
“Both leftover stocks are partly due to the fact that on both policy changeover occasions, the companies responded to the appeal by the government to ensure sufficient product supplies during the transition periods and thus it is only fair that the government resolves this matter on priority,” said, Giri in his letter to the Excise Commissioner.
A senior Delhi government officer said that the matter was under consideration and a decision was yet to be taken about the leftover stock.
“The stock comprised about 70 lakh bottles of liquor. The Excise department was learnt to be in favour of allowing sale of stock of liquor brands registered under the excise policy implemented from September 1.
“A decision about stock of those brands that were yet not re-registered is yet to be taken,” said the officer.
If the stock is not allowed to be sold, then it will require to be destroyed as liquor cannot be sold without a legitimate license, officials said.
The CIABC said that under the policy effective from 1 September 2022, the brand license fees is Rs 25 lakh onwards per brand per annum for India-made whisky brands, whereas under the policy effective prior to that it was just Rs 1 lakh.
The brand license fees which is meant to be for full year is being charged in toto, even though less than seven months remain in this excise year.
“Many brands, especially in premium and niche segment where volumes are low cannot expect to recover this high fee and hence are compelled to not re-register. This has resulted in unsold stocks of these brands lying in trade as on 1 September 2022,” Giri said.
He also referred to a provision that allows a 15-day period for the licensees to sell these stocks, with further extension of 15 more days.
Giri urged the government to allow the licensees to sell the leftover stock for at least two months or till the stock lasts.
The excise duty that will be paid on these stocks will add to the government revenue and help manage the shortage of premier liquor the city, Giri contended.
(WITH INPUTS TAKEN FROM PTI)
