Govt. proposes to restricts duty-free alchol purchase and cigarettes.
In the upcoming budget, the government may impose restrictions on the number of bottles an individual is allowed to carry.
The Commerce Ministry of India has made a proposal to the Finance Ministry of India recommending that only one bottle of liquor should be allowed to be purchased at duty free(tax free)shops in airports by an idividual, while cigarette cartons could be prohibited. The steps are being taken to reduce import of non-essential goods.
An IANS report states that the Indian airports are likely to incur a revenue loss of Rs 650 crore per annum if the reported recommendations are accepted. The move will be detrimental to the liquor companies as duty free is an additional source of business to them and it contributes a very good amount of profit to these companies.
The move to restrict import of liquor along with a complete ban on cigarettes through duty free shops will have an adverse effect on the Indian civil aviation sector, including airports, airlines, passengers and duty free operators.
The proposal to restrict alcohol sale at duty free shops will further increase aeronautical charges at airports by at least ₹200 crore annually, which will lead to higher air ticket price, Association of Private Airport Operators( APAO) said in a statement.
“At most Indian airports, duty free revenues make up 15%-20% of the total non-aeronautical revenues and sales of liquor and cigarettes together account for over 75%-80% of overall Duty Free sales and to make up the revenue loss on account of these new restrictions, the Aeronautical Charges will have to increase which will have to be borne by airlines and passengers,” APAO said.
The proposal to restrict quota of alcohol sale at duty free shops in airports is also likely to impact state-owned Airports Authority of India (AAI), which operates the maximum number of airports in the country.
