Importing wine into India sounds like a lucrative business proposition. But if that is really the case, why have some companies shut down and so many others are struggling to stay afloat? Without further ado, here is a step-by-step explanation of the various stages of duties, taxes, and other levies that an importer has to pay in order to get wine into India. India is best regarded as a giant subcontinent, a unified entity wherein each smaller part adheres to the larger central administration but then each state also has its own set of exclusive laws which can be (and most often are) entirely different from the central laws as also from those of other and/or neighbouring states. Three states will be covered in this entry: Delhi, Maharashtra (Mumbai/Bombay), and Karnataka (Bengaluru/Bangalore).
One last caveat: all taxes and levies are applied in a cumulative manner, which further inflate the final price much beyond the mathematical sum of all the individual tax/levy percentages.
The following additions are common to all foreign wine, no doubt which state they are destined for. However, these are not levied on wines of India being sent from one state to another.
- 1. Let us start with a wine at 1 Euro, CIF. It arrives into India and a 1% levy is added, and what we arrive at is then the assessable value (AV).
- 2. Next comes the Central duties, aka Customs. This is 150% on the AV and then, to that is added an extra 4%. The cumulative customs levies amount to 160%, thus giving us the customs-paid price (CPP).
- 3. To this the importer will add his margin, safe to assume anything up to 20%. Let’s call this new amount now the Importer’s Price (IP).
- 4. The Importer will take this forward and hand it to the distributor for the respective state for where the shipment/lot is destined. Thereon, the levies will vary for different states.
DELHI
I. The wine labels need to be registered for the period of one financial year, from April-March. Cost – INR5000/annum/label. So a house bringing a white and a red wine from their own Domaine (even if with the same brand name) will have to register them as two different wines.
II. The wine will now be levied with a Vend Fee, which is 65% of the IP as mentioned above. It is called Vend Fee although it is a state levy. Why not Excise? Hmm, we’ll get to that later, maybe. Let’s call this vend-fee paid price (VFPP).
III. En suite, we add the distributor’s margin, which, safe to assume, can be about 15% of the value, thus giving us the distributor price (DP).
IV. The retailer will buy the wine at DP, and will have a quasi-fixed margin, say about INR50/-. I say quasi-fixed as the state government sets the Maximum Retail Price (MRP) for all wines sold within the state of Delhi. Not very lucrative to be retailing wine then really. Oh wait, the law reads, either INR50/- per bottle or else 15% of the MRP, whichever is lower! Yep, that’s it. Fifty measly rupees.
V. Finally, a 20% VAT when one buys the wine. Strange, how a wine has excise and VAT both levied on it…oh wait, that wasn’t excise. That was a ‘Vend Fee’. Not the same thing. Oh no, not at all. All’s well then.
MAHARASHTRA
I. The registration here is INR5000/wine/annum.
II. The excise policy is simpler here. INR225/bottle for an MRP up to INR6000. Beyond that, it is 5% of MRP. Simple, that. Also, effective as it makes expensive wines become a better deal whereas the levy ensures level-playing field for entry-level foreign wines and local Indian wines, for the latter too have their tax-and-levy woes to have addressed.
III. Then it is the distributor’s margin, which can be somewhat similar to Delhi.
IV. The retailor here can add his clean 12% cut.
V. VAT stays.
KARNATAKA
I. The Karnataka State Beverage Corporation Limited (KSBCL) controls all distribution of alcohol for the state.
II. Registration is INR10,000/wine/annum.
III. They levy an excise levy of INR225/bottle.
IV. KSBCL then commands a 0.5% (distributor) margin.
V. Retailer adds 10%.
VI. No VAT! Hurrah! Why? Really!? You wish to know why they don’t charge more? Well, since they already added the margin above in point IV. But it is one most sensibly tagged margin of 0.5%.
Hope this helps outline the system, or rather, systems, prevalent in India. Sure some of you may find them inexplicably prohibitive but I know many places where the laws can be even more quirkily archaic.
Once again, this is a sketch and it merely outlines the structure of the duties and taxes. It leaves out certain details – Octroi in Mumbai, Chemical Analysis costs for new wines being registered in a state, etc. Margins commanded by both distributor and importer can always vary, depending on order size and distance from warehouse, as also other conditions of delivery (for e.g. using a refrigerated truck versus an open tempo.)
The idea was not to create a detailed flowchart for prospective exporters around the world but to merely highlight how a wine price will change to reflect the various additions along the route.
A bit discouraging some of you may feel but I can assure you that a lot of wine still sells in India. How come? –Because Indians are used to these pricings. Sure we drink better when we travel but in India, especially for those who have travelled extensively, or lived or worked abroad, and have inculcated this habit, they surely do try to keep up with it as much as they can stretch to allow themselves a glass to go with their meals. In other words, we may not be lapping up the Grands Crus and the Super-wherevers of the wine world just yet, but we are building slowly yet steadily into a formidable wine-consuming nation.
As a personal observation, if I may dare-add, in the long run, the taxes will change. They will modify in a manner that expensive wines will stand to gain from it. Lower-priced wines will face a two-edged sword: the burden of high levies and the rise in the overall quality of Indian wines which shall make it ever more competitive in the retail space in that (affordable) price segment. The discerning Indian vino will soon be one who appreciates his Barolos and Barossas, (his Champagnes and his Cape Blends, I add, for political correctitude) and enjoys them from time to time, but will sip more and more locally produced wines to quench his quotidian thirst. It’s not a bad thing at all. Good cheers all around then!
(Given my lack of dexterity with uploading a worksheet, I am happy to provide the spreadsheets to help work the calculations for the states mentioned. You may write in requesting me it. Don’t forget to say please.)
Ravi Joshi
November 19, 2012 7:09 pm
A very informative article simplifying the understanding of one of the most complicated & bureaucratic taxation systems in the world. Can I PLEASE have a copy of the worksheets? Thanks in advance!
manoj ramola
November 20, 2012 7:54 am
interesting to knw the different type of taxes levy on imported wines , which makes them so much expensive , if u could tell us abt the pricing strategy of indian wines to , i will be very grateful to u.
Magan
January 9, 2013 7:34 pm
i mailed you. do revert for more details. cheers!
indra
January 9, 2013 7:22 pm
sir,
i found ur article very informative.cd u please send me the detailed work out on landed cost for wine as i am planning to import and sell in india- karnatak and maharashtra.
kindly help
indra
Magan
January 9, 2013 7:33 pm
mailed. Hope you received it.
Sunil
January 11, 2013 4:55 am
Very informative. Thanks much for putting it together. Could you PLEASE send me the worksheets?
Magan
January 16, 2013 10:16 am
absolutely! you did say ‘please’… 🙂
sm
January 15, 2013 9:16 pm
Hi Magan,
This article is great. Can you send me more information? May we can together as well!
Best
TMAN
January 17, 2013 1:52 am
Hi Magan,
Fantastic article. To the point and full of information. If it is possible, please can you email me a copy of your detailed workings? I am very eager to learn more of what is happening in this space.
Thank you
Sushmit
January 18, 2013 6:25 pm
Hi, very nice article. Can you please email me the worksheet.
nitin
January 18, 2013 11:25 pm
Hi
Can u plz send me more details incl the worksheets
I am particularly interested in delhi. Mumbai
Thanks a lot!
Deepa
January 24, 2013 11:28 am
Dear Mr. Magan,
I work with a logistics company and need guidance on how an individual can import wine into India for personal consumption. He lives in India and wants to import wine.
Magan
February 14, 2013 5:42 pm
Importing wines for personal consumptions is tricky. he might be required to declare values and pay duties for the bottles, unless it can be classified (and is permissible under) transfer of residence…
Harri
January 24, 2013 3:03 pm
Mind boggling-and to think I was contemplating importing wines from ZA.
Please may I have the work sheet………..Merci
Devin Jobanputra
February 8, 2013 7:29 pm
Hi Magan,
Could you please send me the worksheets
Sagar Shetty
February 12, 2013 10:29 pm
A very informative and helpful article indeed. Please help me by providing the worksheet. Also can you tell me if it will be viable to bring cheaper french wines to maharashtra as I have a contact in France who is in position to supply wines of varied price range as per the demand.
geini34
February 20, 2013 8:22 pm
Hello Magan,
Your article is really interesting. Would it be possible to send me your excel worksheet please? Thanks a lot
As soon as I’ll manage to import my wines in India, of course you’ll receive many samples.
Thanks again for your really really useful information
Sagar Parkhe
March 2, 2013 12:42 am
A very informative and helpful article .Please help me by providing the worksheet. Also can you please help in my query, I am planning to import fruit wine in Maharashtra and want to market it with my own brand so what will be additional duties or licences I need to apply
Rich
March 3, 2013 1:13 pm
Hi Magan.
I am a supplier of fine New Zealand wines from New Zealand. Your article seems to be informative enough to give me a rough idea about the wine culture in India. However, what is your take on the demand of fine New zealand wine in India and what states are the ones that may be keen to sip some fine quality wine.
Also if you “please” forward me the spreadsheet that you are talking about and correct me if I am worng but I guess the import duty has dropped to 30% from 150%.
Looking forward to hear from you.
Cheers Rich.
Ananth
March 4, 2013 3:19 pm
Dear Magan,
Thank you for your article. Would you please share your worksheet with me? Thanks much!
dutt
March 4, 2013 8:26 pm
Could you send me a copy of the spreadsheet.pl.
Thanks
Sandeep
March 5, 2013 2:54 am
Hi Magan ,
Thank you for bringing such a informative analysis of taxes & hidden costs associated with importing Wines to India . I am based in Australia & planning to get some hands on to this industry . I will highly appreciate if you can please ( Mentioned please) send me the workings for landed cost . Also , do you have any information on Chandigarh ??
Thank you for your assistance
Regards
Sonia
vijay
March 9, 2013 10:45 am
Hi Magan,
Could you please send me the work sheet. The article is very informative but sure is scary at the same time.
Raul Balduzzi
March 12, 2013 1:54 am
Dear Magan,
Excellent your article. could you send it to me please?
I am an Argentinean exporter of wines, if you want to start your own business of importing wine just e mail to me, or if you know some importer of wine contact to me , because we want tos tart making business with India Market.
Best regards
ISaini
March 20, 2013 1:17 pm
Dear Magan
An excellent article!
Please would you send me a copy of the worksheet.
Many Thanks
ALASTAIR WOOD
March 20, 2013 8:44 pm
Many thanks for the article and please send me the worksheets. Kind regards.
Sanghamitra
April 2, 2013 6:43 pm
Salut Magan,
pouvez-vous s’il vous plaît envoyez-moi les feuilles de calcul.
merci! 🙂
Babs
April 5, 2013 9:14 pm
Hi Magan,
A good article to the point in the right time as I am planning to import wines into India from Europe and Australia. Thanks for the write up.
Can you please send me the information and worksheets?
Thanks,
Kind Regards,
Babs Srini
Shazan Ali
April 7, 2013 3:34 pm
Hi Sir,
Your article is really informative .I request you to please share your worksheet.
As i have to incorporate a company for one of my client who wants to import Wine.
Thanks & Regards
Shazan
gagan deep singh
April 8, 2013 10:27 am
I am an entreprenuer and am looking to start the import of wines.I would like to thank you for this article as it is very informative.Could you kindly send me the worksheet mentioned herein so I could have a clearer picture on the costings and details of the wine.
Further I would like to thank you for all the effort put in by you to make this.
Regards
tejas
April 10, 2013 6:23 am
hi your article is very informative. can i please have worksheets?? also i would like to have your suggestion, as an exporter fro australia, which state should i choose to import my wine in india in your opinion? thanks
SunnySingh
April 16, 2013 8:51 am
HI Magan,
This was a good read; I found your article insightful. It helps open one’s eyes to the level of complexity of foreign wine in India. If I could get a detailed version of your worksheet, I would much appreciate it.
Sadanandan V. A.
April 21, 2013 8:30 pm
Dear Mr. Magan,
I work in Nigeria and I need your guidance on how my company (registered in Mumbai and have base in Bangalore) can import wine into India for whole sale/ distribution in Karnataka. Please guide me how the ratio should be for Red & White if the quantity is one 40ft container with average and premium grade wine from France.
Your informative explanations inspired me to come back to you for more guidance. Please assist me by providing the worksheet.
Regards.
Sadanandan V. A.
April 21, 2013 8:37 pm
Thanks Awaiting.
Sadanandan V. A
Saurabh
April 22, 2013 8:31 pm
Hi Magan,
Great work. Could you please send the work sheets:)
Thanks again for sharing the information.
-Saurabh
Akshath
April 23, 2013 6:27 pm
Dear Magan,
Thanks for the informative article. Could you please email your detailed working/flow sheet to me
Just curious, is this the same procedure/duties applicable to all entities or are concessions provided for entities such as 5-star hotels etc?
Could a foreign supplier not price his wine very low in order to get past duties and sell at his normal rate to the end buyer/client or are there any measures which curtail such practices ?
Harsharan
April 26, 2013 7:54 pm
Hi Magan
A very informative and clear explanation of wine duties in India.
Can I please have a copy of the spreadsheet?
Thanks
Harsharan
Vipul
May 2, 2013 4:01 pm
Hi Magan,
Thanks for the great insight. Please reply to akshat’s question as i was also thinking the same regarding 5 star hotels. Please email me the worksheet also.
Regards,
Vipul
Medha
May 5, 2013 6:49 pm
A very informative article. Can you please send me worksheet as well? Thanks in advance.
Manu
May 6, 2013 3:25 am
kindly please send me the worksheet thx
amsiraj
May 6, 2013 3:40 pm
I am also planing to import from australia. and I am talking with Aus company.
Could you send me a copy of the spreadsheet.pl.
Thanks
Shaishav Shah
May 6, 2013 3:57 pm
Magan,
Thanks for this informative article, would you be able to share your analysis worksheet please?
Thanks in advance!
sidd banerji
May 7, 2013 7:41 pm
An exquisite article and so well elucidated.thanks.
Can u please send me more details and the worksheets
I am particularly interested in Delhi. Mumbai.Kolkata,Bangalore,Hyderabad and Chennai.
Sajid Khan
May 15, 2013 2:48 pm
Hello Magan,
Thanks for a good read. Your article was very informative. I recently met a Wine producer who was interested in bringing his wine to India.
I would appreciate if you could ” please ” send me the work sheet.
If this does go ahead then I would be inviting you to a wine tasting evening I am organising soon.
Hope you are based in Mumbai for you to be able to make it.
Thank you very much.
Ramesh
May 15, 2013 5:26 pm
hello please email me further details will be thank ful
Mandar
May 17, 2013 5:29 pm
Can you please please share the sheet with me? Thanks you in advance. Do you know what if bulk wine is imported?
vivie
May 21, 2013 10:30 am
Hi All,
I work for a french wine-maker and we are currently looking for clients interested in importing wines from us into India. We have a asian distribution office in Hong Kong , which is much closer to Indian ports than Bordeaux. If any interest, please contact me at vivat(dot)jay(at)gmail(dot)com
Merci
Himanshu
May 23, 2013 5:31 pm
Dear Megan,
Your article is truly informative and extremely useful in helping me clarify various concerns regarding importing wines in India. And nonetheless, your experience and knowledge of this field is most impressive.
I am working on to import wine from Argentina and chilly in Delhi, Mumbai and Bengaluru regions. I would request you to provide me your detailed worksheet, please.
Sincerely
Himanshu
Jyothi
May 31, 2013 8:09 pm
Hi,
Can you please email me the worksheet too?
Saurabh
June 2, 2013 2:00 pm
Really nice article…could you please send me the detailed working sheet for better understanding.
Thanks again 🙂