Reducing import duties through tax breaks on digital payments: this is what the food and beverage industry expects from the 2024 budget

Budget 2024: Some food and beverage industry experts are calling for a gradual reduction in excise duties, which currently exceed 50% of the retail price, to boost volume and curb illicit trade.

Budget 2024 Latest updateAs the central government gears up to present Budget 2024 on February 1, the food and beverage industry has big expectations from Union Finance Minister Nirmala Sitharaman. Some industry experts expect tariffs on alcohol products such as spirits, beer and wine to drop. While some other experts expect financial support or tax breaks for the introduction of digital payment systems.

Drink prices need to come down

In conversation with India.com: Ajay GodaPartner Byg Ventures said that as he works in the Alco Bev retail industry (bars and restaurants), he is definitely looking forward to the drop in alcohol prices to make them more affordable for consumers.

“But excise duties are the subject of the state and this has more effect on pricing. From the Union Budget, we expect that import duties on alcohol products such as liquor, beer and wine will decrease. Currently this is 150%. The FTA (free trade agreement) has made this happen. There are talks and negotiations that this could drop to 100% and later even to 50%. We are curious whether a reduction in import duties will be announced in the 2024 budget.

He added that states should also reduce their excise taxes on alcohol. he said that in Karnataka, the excise duty on imported bottles and liquor is Rs 5,358 per litre, which is extremely high.

Reduction of excise duties

Tushar BhandariManaging Director of Associated Alcohols & Breweries Limited, said: “The sector is buzzing with potential, fueled by a thriving premium segment (8-10% growth) and rising disposable incomes.

“We seek a gradual reduction in excise duties, which currently exceed 50% of the retail price, to boost volume and curb illegal trade. Harmonizing government regulations and streamlining permits will unlock operational efficiencies. E-commerce, a Rs 5,000 crore behemoth with a growth potential of 15-20%, needs a clearer regulatory framework to flourish,” he said.

Subsidies for local food purchasing

Manik Kapoor, Director of Gola Sizzlers, Cafe Hawkers and Sambar Soul Restaurants: Anticipating the upcoming budget, Gola Sizzlers is hoping for a revamped liquor licensing process, coupled with lower fees. In addition, support in the form of subsidies for local food purchasing is essential to tackle rising purchasing costs. We also look forward to tax adjustments and incentives to promote 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 is seeking government support for technology upgrades. This includes financial support or tax breaks for adopting digital payment systems, online ordering platforms and modern kitchen technologies.”

He further added that training and employment programs are crucial in raising service standards and creating more employment opportunities in the hospitality sector.