Budget 2024: Some of the experts in Food and Beverage industry yearn for a gradual reduction in excise duties, currently exceeding 50% of retail price, to stimulate volume and curb illicit trade.
Budget 2024 Latest Update: As the Central government is getting ready to present Budget 2024 on February 1, the Food and Beverage industry has great expectations from Union Finance Minister Nirmala Sitharaman. Some of the experts in the industry expect for the import duties on alcohol products like spirits, beers & wines to come down. While some other experts expect financial assistance or tax breaks for adopting digital payment systems.
Liquor Price Should Come Down
Speaking to India.com, Ajay Gowda, Partner, Byg Ventures, said as he is in the retail side of the Alco Bev industry ( Bars & restaurants), he definitely looks forward to the alcohol prices coming down, to make it more affordable to the consumers.
“But excise duty is the state’s subject & this has more effect on its pricing. From the Union Budget, we expect for the import duties on alcohol products like spirits, beers & wines to come down. It is presently 150%. The FTA ( free trade agreement ) has warranted that this happens. There are talks & negotiations that this could drop to 100% & later to even 50%. We are eagerly anticipating if any lowering of the import duties will be announced in the budget 2024.
He added that the states have to also supportively reduce their excise duties on alcohol. he said in Karnataka, the excise duty on imported bottles and spirits is present at Rs 5358 per litre which is extremely high.
Reduction In Excise Duties
Tushar Bhandari, Managing Director, Associated Alcohols & Breweries Limited, said, “The industry is brimming with potential, fuelled by a booming premium segment (8-10% growth) and rising disposable incomes.
“We yearn for a gradual reduction in excise duties, currently exceeding 50% of retail price, to stimulate volume and curb illicit trade. Harmonizing state regulations and streamlining permits will unlock operational efficiency. E-commerce, a Rs 5,000 crore giant with 15-20% growth potential, needs a clearer regulatory framework to flourish,” he said.
Subsidies For Local Food Sourcing
Manik Kapoor, Director of Gola Sizzlers, Cafe Hawkers, and Sambar Soul Restaurants: Anticipating the upcoming budget, Gola Sizzlers hopes for a revamped liquor licensing process, coupled with reduced fees. Additionally, support in the form of subsidies for local food sourcing is essential to tackle rising procurement costs. We also look forward to taxation adjustments and incentives to foster sustainability, paving the way for a more robust F&B industry.
Rajat Kapoor, Director of Gola Sizzlers, Cafe Hawkers and Sambar Soul Restaurants, said, “As the industry embraces digital evolution, Gola Sizzlers seeks government support for technological upgrades. This includes financial assistance or tax breaks for adopting digital payment systems, online ordering platforms, and modern kitchen technologies.”
He further added that training and employment programs are key to elevating service standards and creating more job opportunities in the hospitality sector.