Commerce Ministry's Restrictions On Duty Free Alcohol

Commerce Ministry's Restrictions On Duty Free Alcohol

As global travellers return from an overseas trip, they may be able to purchase only a single litre of liquor at Indian airports duty-free shop very soon. The Commerce Ministry has come up with recommending the restricting purchase of tax-free alcohol to only one bottle at duty-free shops in order to reduce tiny excise loss and import of non-essential goods.

Also, the government has made the purchase of cigarette cartons prohibited at duty-free shelves. The measures will be announced by finance minister Nirmala Sitharaman in the Union Budget on 1 February. “We have also recommended to the finance ministry a hike in duties on 200 items we consider non-essential," a commerce ministry official said on condition of anonymity.

Now, the public is calling this move by Modi government as regressive as cutting the duty-free quota will only increase the higher sale of alcohol in the grey market and corruptions in customs. But, the proposals are made in order to boost India’s manufacturing exports to create more jobs and limit non-essential imports to narrow its trade deficit with countries such as China.

“We are competing with duty-free shops in Malaysia, Dubai and Singapore. If travellers are going to buy from other duty-free shops, we are the losers. The government should worry about people buying at duty-free shops in other countries, not in India," an official of the Association of Private Airport Operators said on condition of anonymity.

The association has also proposed doubling the baggage allowance at a duty-free shop in India from ₹50,000 at present to ₹1 lakh, which could lead to increased foreign exchange earnings. Duty-free shops are licensed as a “private warehouse’ under Section 58 of the Customs Act, 1962.