Reforms to bring greater transparency for excise, license for sale, import, and export permit of alco bev in India
With continued engagement and representations from UKIBC, DPIIT has finalised the BRAP for the Fiscal Year 2020-21 and has included reforms for excise, license for sale, import, and export permit of spirit and Indian Made Foreign Liquor.
Department for Promotion of Industry and Internal Trade (DPIIT) has identified State Excise as a reform area, which is anticipated to positively impact the alcoholic beverages. The Indian Constitution explicitly places the responsibility for regulation and taxation of alcohol in the hands of the States thus, 30 sets of laws govern the sector making it highly regulated.
Currently the alco bev companies face procedures that are laborious and time consuming. Many States still manually generate permits/passes with documents physically passing through several levels of bureaucracy, lacking transparency and causing delays. With this background, UK companies have been requesting for e-governance, which, if implemented as per BRAP by DPIIT, can enhance efficiencies and transparency for economic operators.
DPIIT has suggested that States include certain reform points under BRAP with an objective of greater transparency. DPIIT has proposed to include verification by third party about the authenticity of the approval and registrations as granted by the competent authority.
UKIBC, on behalf of its members, highlighted the benefit of e-governance for the industry on several occasions to enhance efficiencies and transparency for the food business operators. The unified approach as adopted by UKIBC, which included working with DPIIT and other key stakeholders, resulted in a positive reform.
As stated by DPIIT itself, the suggested reform aims to bring transparency and emphasised on the fact that there is no requirement for submission of a hard copy. Additionally, verification by third party about the authenticity of the approval or registration granted by competent authority is anticipated to play a vital role in real translation of the advised BRAP.
Recent years have seen significant UK investment in the domestic spirits sector in India, with British companies supporting innovation, value creation and driving the globalisation of iconic Indian brands. The Seventh Schedule to the Indian Constitution grants exclusive powers to State Governments to regulate alcohol, levy excise duty on its production, and the powers to tax the sale of alcohol, resulting in over 30 unique sets of laws governing production, distribution and sale of alcohol. To make, move and sell alcohol beverages in India, companies must obtain licenses, approvals and permits at every stage of the process starting from manufacturing, to transport, storing and selling, and the payment of duties and levies. Such reforms will help ensure the integrity of the marketplace by enhancing the operating conditions for legitimate quality products of the highest standards produced by domestic and international players. Moreover, this will promote responsible drinking decisions and make important contributions to the Indian economy.
The inclusion of the third-party verification for implementation of BRAP reform points by the State government will play a vital role as it will bring more confidence in the entire exercise as conducted by the competent authorities. The UKIBC and its members are hopeful that this development will have a constructive impact on UK food and drink businesses’ increasing interest in the Indian market, and the UKIBC shall remain committed to work closely with DPIIT and industry to further strengthen the UK India economic ties.