BAI seeks uniform excise duty on beer

The Brewers’ Association of India (BAI) has urged the Delhi government to ensure a level playing field for domestic beer manufacturers, highlighting a significant tax disparity that favours imported beers from Bhutan and Nepal.

In a letter addressed to the state government, the BAI stated that Indian brewers are subjected to a 150 percent excise duty and an additional 10 percent excise duty, whereas beer imported from Bhutan and Nepal is taxed at just 65 percent excise duty with no additional levy. Due to India’s trade agreements with these neighbouring countries, such imports are also exempt from customs duty.

This tax gap has enabled Bhutanese brands, many of which are largely unknown in other parts of India, to dominate the Delhi beer market by leveraging their higher margins for aggressive trade promotions.

The BAI, which represents major players such as United Breweries, AB InBev, and Carlsberg, cautioned that this situation not only disadvantages local producers but also results in reduced tax revenue for the government, an estimated ₹20 less per bottle. The association emphasised that the continued disparity may encourage Indian beer companies to relocate operations to these countries, thereby undermining the Make in India initiative.

Additionally, the BAI has recommended that the Delhi government apply the same 150 percent excise duty to all beers, whether domestic or imported, to ensure fair competition and revenue parity.