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.)
Vishwaraj Jadeja
February 2, 2014 10:56 pm
Thnx bro, too gud as it stands simplified. One for me too.
manoj
February 3, 2014 7:50 am
hi, magan . good information .. in article.. will you send me the spread sheet of costing , please. its will great.
. Thanks lot
manoj
Chetan Agrawal
February 26, 2014 7:38 am
Hey Magan,
I was gathering some info on this, so as to decide upon the business opportunity. Since, the article was written in 2012, is the situation still the same.
Kindly share your calculation sheet so that I may also have math in place.
Regards,
Chetan Agrawal
agrawal.chetan@gmail.com
Akshay C
February 27, 2014 1:09 pm
Nice article, Mr. Singh. Thinking of getting into the business of wines. Any help would be great from your side. To begin with, a copy of your spread sheet would be great. Could you please email me a copy? Also, how do I get in touch with you? Do you prefer emails, or can I call you? I’m from Mumbai. Cheers!
Yogesh
February 27, 2014 7:18 pm
Hi Magan,
Its really a good article and very informative.
I am sure you have the worksheet of the same can you pls share that with me on yogesh2nagar@yahoo.com so that I can calculate something on the same
Thank a TON in advance
Yogesh Nagar
Ranjeet Singh
March 1, 2014 2:32 pm
Dear sir,
Thanks, please be kind to send spreadsheet of wine, beer and spritis for delhi.
Regards
Ranjeet…
SHRINI AVULA N
March 25, 2014 9:10 pm
Hello Sir, It was really nice article to understand common man to know things. Could you please send me the work sheet. Just curious any other licence we do require to sell wine India.
Regards,
SHRINI
Sushma Wankhede
April 4, 2014 5:34 pm
Hi Magan,
Interesting article and is really informative. Is there anyway we can get some information on importing and exporting Beer, Whiskey, and Rum also? We would like to get some detailed information on the same. Does these duties vary from state to state? Some guidance on this will be highly appreciated. I have mentioned my email ID.
Regards,
Sushma
prashant
April 11, 2014 7:18 am
Pls mail me a copy of worksheet, thanks
Prashanth M R
April 18, 2014 5:34 pm
Hi,
You provided us more informative over the subject.
We have a party who can supply Beer / Wine to India – could you please share the business plan / spreed sheet which is more helpful to me put up a business case.
Regards,
Prashanth M R
Manish Kothary
April 24, 2014 12:10 pm
Nice article.
Please can you send me an excel sheet for this
Thanks
Manish
vaibhav
April 30, 2014 3:41 pm
Hey magan gr8 work can u pls mail me ur data.
Kamal
May 4, 2014 11:36 am
Hello Mr. Magan,
I have read the above article abut importing wine to India which is very impressive, Can you please send a copy of the spread sheet, to look into it.
Regards
Kamal
santhosh
May 7, 2014 10:42 am
Great Article Mr. Magan. Very informative and straight forward, succinct. May I request for the worksheets Please. Would you be kind enough to share them with me as well Please..
Best Regards,
Santhosh
Srini
May 9, 2014 1:14 pm
Very informative article.
Thanks.
Navreet
May 15, 2014 4:49 pm
Hi
Magan i wanted to know what is your background in the wine industry, and where are you currently based.
Fuhar
May 19, 2014 1:39 pm
Hi, interesting…can you please email me the worksheet
Anand
May 29, 2014 8:27 am
This is very usefull you have cut down my research by a quarter. Thanks for this great info. Can you please share the excel spread sheets
Shubhrojyoti D Senapati
November 3, 2014 12:42 am
Your article is very helpful & thanks for the great info, would be grateful if you can provide the spread sheet of calculation
regards
Magandeep Singh
May 7, 2015 12:28 am
Allow me some time to update and upload a new post with the relevant info not just for Delhi but also a few other states. Thanks for your encouraging comment.
Partha
November 6, 2014 8:29 pm
Hi Magan,
Could you please share the spreadsheet?
Many thanks in advance.
Regards,
Partha
Magandeep Singh
May 7, 2015 12:28 am
pardon the delayed revert but had some issues with my spam filter. All back on track. Allow me to put up a new post with tax regimes for Delhi as also a few other states shortly. Thanks for reading…
alok
January 31, 2015 7:49 pm
Hi Magan
Kindly mail me the excel sheets and any updates.
regards
Col Alok
Shivdas
April 1, 2015 10:11 pm
Hi, interesting article can you please email me the worksheet and since this article was written in 2012 is it still valid or do you have an updated version.
Rudraksh
May 30, 2015 9:20 pm
Hi Magan,
Can you please update the post or let me know he updated costing for Wine importing in India?
Thanks in advance.
Rudraksh
Magandeep Singh
June 1, 2015 11:43 am
Will do shortly and post something on it…
Sara Z. Mijares
June 11, 2015 1:06 pm
Interesting article. Good information. Can you please share your spread sheet with me.
Thanks
Magandeep Singh
June 16, 2015 3:27 pm
I am updating the sheet and shall upload a new version shortly.
Raj J
June 14, 2015 1:04 pm
Hi Magan
I just wanted to find out, I would like to order a couple of bottles of whiskey online, The company is from the UK and they deliver in india.
The duties in india are supposed to be paid by me. How much duty would be incurred?
Thanks and regards
Raj
Magandeep Singh
June 16, 2015 3:26 pm
Hey Raj,
Legally, you can not import stocks purely through courier. Or at least one is not supposed to. However, if some courier company is willing to expedite them to you, then they will tell you how much duty will be levied. the odd bit is, often when I have received samples from abroad, for the same set of wines I have paid different duties on different occasions due to the way the Customs department decided to ‘load’ the declared values of the bottles. Loading is done when they believe that the stated price is lower than the actual price of the product.
Since you say the company is already supplying to India (share deets with me on email, sign me up too!), expect to pay abotu 160% customs at least. I don’t know what the state excise policies are in such cases. But yeah, still should work out much cheaper than buying from a retail shop here. Slainte!
Gautham
June 28, 2015 5:28 pm
Dear Magandeep Singh,
It was a very informative article. Do you have any insight on the policies of other southern states, viz: Tamil nadu and Telangana. Do let me know if i can be in touch via email. Also can you share some information on consumption patterns in the South of India.
Thanks and regards,
Gautham
Magandeep Singh
April 17, 2016 10:38 am
Honestly I don’t have the details on them. Kerala just went dry so that’s one less for now. But allow me to try and compile a report.
Uday
July 15, 2015 7:40 pm
Hi Magandeep,
Fantastic Article & I found this extremely informative.
Can you please send me the latest updated worksheet that you mentioned above.
Best Regards
Uday
Magandeep Singh
April 17, 2016 10:39 am
Coming early May. Promise!
Nirvair Dhillon
July 19, 2015 10:13 am
Hi Mandeep,
Nice article it seems you have done the home work very well. Can you please email me the spreadsheet so that I can work out the prices. Does one also have to register the labels for importing and selling spirits in the various states?
Regards
Nirvair
Magandeep Singh
April 17, 2016 10:39 am
May first week it shall be uploaded here. Thanks
Sunil Mottana
July 20, 2015 9:51 am
Hi Magan
Thank for the article, Can you share with me the costing details for Karnataka.
I am looking for opportunity in this business.
Regards
sunil
Magandeep Singh
April 17, 2016 10:37 am
I will upload a sheet for Maharashtra and Delhi by Early May; allow me to try and work on Karnataka as well.
Abhay
July 20, 2015 2:42 pm
Dear Sir,
Greetings. Your article id very insightful about importing wines and beers. We are looking forward to importing them as well. We seek your guidance , it would be helpful if we could get spreadsheet and calculations. Our emal is cxchts@gmail.com
Best Regards
Abhay
Magandeep Singh
April 17, 2016 10:37 am
Early May is when the next sheet will be updated
Moloy B
July 22, 2015 12:40 pm
Hi Magan
I am looking at exporting wines from NZ to India. Could you provide or recommend importers who would be interested & also some info on current taxes & duties would be much appreciated.
Kind Regards
Moloy
Fairouz
August 18, 2015 12:37 am
Hi, very good article !
Could you please send me the spreadsheet ?
Thanks a lot
Regards,
Fai
Magandeep Singh
March 24, 2016 8:43 am
I resolve to publish a new updated sheet shortly. The policy should be drafted and circulated in the next few months for the coming year. Hope for some positive changes 🙂
SUSHIL PAL
November 7, 2015 3:18 pm
hey ex-ihmtian
i didn’t understand the whole concept but yes i got a glimpse of what it takes to bring good wines to India. i am also a Ihm Mumbai student. hope you will accept my friend request on facebook. always been a admire your work ; what you have started in India as INDIAN SOMMELIER CHAMPIONSHIP.
Magandeep Singh
March 24, 2016 8:42 am
Hello there 🙂
vikram
March 11, 2016 11:27 pm
very impressive but iff we will do this business it will be profitable or not
Magandeep Singh
March 24, 2016 8:42 am
Hi
Pardon the late reply. Site maintenance issues. Profitability, yes but one has to consider a long-term ROI. Short term aspects of this trade are low, very low.
Laura
May 18, 2016 8:13 pm
Hello Magandeep,
Thanks so much for the article and all the info you give, would really appreciate it if you could please send me a copy of your new spreadsheet when you have it available. Looking into importing spanish wines to India and need to be clear on taxes before I make it happen,
Thanks again!
Laura
Magandeep Singh
May 30, 2016 4:35 pm
The new blog post goes up in 2 days and will link to the new sheet. Cheers
Magandeep Singh
June 6, 2016 2:37 pm
Dear all, the update is (FINALLY!) up… http://magandeepsingh.com/indian-wine-duties-revisited/