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Govt stuns grape farmers, wine makers with exorbitant tax move

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BANGALORE: Grape growers and wine producers in the State are stunned with the State government coming out with a Gazette Notification proposing a tax of 177 percent.

The government had earlier promised support to the wine industry and raised the hopes of grape growers but now these hopes have been dashed.

The Government which issued the notification on June 22 has given industry stakeholders only 7 days to file objections. The taxation comes into effect from July 1.

Grape growers and wine producers have taken exception to this unilateral decision of the government, taken without consulting them and taking into account their apprehensions. They have decided to resort to a state-wide agitation and also move the court in this regard.

By this decision of the government, the purchase of grapes by wine producers from the farmers will come down putting the farmers in a crisis even as they already face the burden of not getting a remunerative price for their crops

“The Yeddyurappa government had brought the Karnataka Grape Processing and Wine Policy in the interest of the grape growers. However, the present government has suddenly hiked the tax by as much as 177 percent without holding a discussion with grape growers and wine producers. As a result of this retrograde decision, the present sale of 60,000 cases of wine annually will come down to 15,000. This in turn will affect the growers of the internationally renowned Bangalore Blues variety of grapes, the production of which will decline from an annual 9,000 tons to 2,250 tons. The Bangalore Blues growers have small land holdings and this will affect thousands of small growers,” said Naryanaswamy, a member of the Karnataka Grape Growers Association.

Already a memorandum has been submitted to the Excise Commissioner and the Additional Chief Secretary in this regard. Failure to reduce the proposed tax will compel the grape growers to resort to intensive agitation and also move the court in this regard, Narayanaswamy added.

“The Wine Policy was introduced with a view to encourage consumption of wine, a healthy option, in the place of alcohol with is harmful to health. However with the steep hike in tax on wine, the cost per bottle will go up and beverage consumers will be compelled to go back to the consumption of beverages harmful to health, saidP L Venicatarama Reddy, President, Karnataka Wine Producers association

Six months ago, at a meeting, the government had assured that the hike in tax would not be more than 20 percent. However, without any prior notice or meeting, the government has unilaterally decided to impose high tax causing injustice to both the grape growers and wine producers. By this retrograde decision, most wineries in the state will be shut down, Reddy added.


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