No tax relief for niche wines: Maharashtra government

The state government may have extended the definition of wine to cover brews that are manufactured from fruits, flowers and honey but it has also said that it may not relent on granting them tax holidays. "These are niche wines which do not need excise duty exemptions," a senior state excise department official told DNA.

"Excise duty exemptions are available only for wine manufactured from grapes grown in Maharashtra," the official said. He further added that there was little chance that the tax holiday would be extended to wine manufactured from honey, petals and stems.

"In fact, there is thinking which suggests that the existing policy to grant tax holidays to grape wines may not be continued beyond December 30, 2021. The department may take a view about imposing a certain percentage of excise duty," he added.

The state excise department has widened the scope of the Maharashtra Manufacture of Beer and Wine rules to cover wine made from fruits, flowers and mead (honey). Now, such fruit-based wines are charged excise duty of 100% of the manufacturing cost plus GST.

Producers who had set up units to manufacture dessert wines from fruits had said that a high excise duty regime and a nascent wine market had led to subdued demand for these niche products and sought a tax holiday on lines of that for grape-based wines.

Wines manufactured from grapes grown in Maharashtra have been granted a tax holiday since 2001. "Then, the thinking was that this was a high-value agro-based industry which needs exemptions. However, wine is a product consumed by the elite and upwardly mobile and does not need tax sops per se. In contrast, country liquor is drunk by the working class and accounts for the highest volumes of sales but is yet taxed," he added.

The tax concession is not available for wineries if they mix wine, concentrate manufactured outside Maharashtra or grapes grown outside the state in their wine.