Karnataka government changes duties, taverns to blossom


As many expected, the Karnataka government has notified a new excise rule on wines imported from other states. The new duty applies to all wines made outside of Karnataka and is seen by wine companies as a direct response to Maharashtra’s seven-year-old wine policy that exempts locally made wines from a 150% duty that all other wines have to pay. The new duty is Rs. 300 a bulk litre up from Rs. 10.

Furthermore, the provision of permitting wineries to sell wines at their winery has been removed. Champagne and Sparkling wine will not be clubbed as “fortified wine.” Fortified wines are being defined as wine with a strength of 24% alcohol or more.
Commissioners can also issue a license for sale/consumption of liquor at wine taverns at a cost of Rs. 1,000 per day. This used to be Rs. 10,000 and practically impossible to get. This will be an occasional license fee allowing people to serve wines far more easily. Wines imported from overseas will have to pay an Additional Special Fee of Rs. 300 per bottle. It is fair to say that the change in license costs for wine taverns is going to do a lot for the local wine consumption.
With these changes and others, the total area under grape wine cultivation is expected to go up from the current 700 hectares to 1,700 hectares which is expected to benefit 400 farmers in the state.
The number of wineries in the state is expected to go up to at least 25 from the present two – in Doddaballapur and Bijapur – when pending applications are cleared in the next couple of months, according to Karnataka’s additional chief secretary and development commissioner L Vasantha Kumari , who is also the chairperson of the State Wine Board. Though Karnataka had come out with a comprehensive Grape Processing and Wine Policy in March 2007, with proposals to set up wine parks and treat wineries as horticultural and food processing industries, eligible for incentives and facilities, she said rigid norms under excise rules hampered the growth of the wine industry.
Read the Times of India coverage.

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