Prices of some premium Scotch whisky in Delhi could fall by 10-15% after a reduction in import duty on UK-origin liquor, although the final benefit to consumers will depend on the state government’s review of retail pricing, an official said on Sunday.

An official said the excise department is studying how the revised tariff structure will affect liquor prices in the Capital. (Unsplash/Representational)

According to the official, the excise department is analysing prices, and the final decision will be taken once the excise commissioner is appointed.

Ravi Jha, who was holding the excise charge, was transferred to Arunachal Pradesh last month.

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“The final decision will be taken once the commissioner is appointed. The government does not want to rush into the decision. There is an existing stock in the market. If the prices get revised, the new stock will come with a low price tag,” the official said, on the condition of anonymity.

As the old stock will be difficult to sell if prices are revised, the department may set a cut-off date for the availability of new stock at lower prices, the official said.

Under the India-UK Comprehensive Economic and Trade Agreement (CETA), customs duty on eligible UK whisky and gin was reduced from 150% to 75% with effect from July 15.

A second official said that the excise department is studying how the revised tariff structure will affect liquor prices in the Capital.

The cut in customs duty is unlikely to translate into an equivalent reduction in retail prices. State excise duty, taxes, trade margins and other costs will continue to form part of the final price. The extent of any reduction will also vary by brand, depending on eligibility for the concession and importers’ and retailers’ pricing decisions.

Officials said the new prices could be announced by the end of October. In neighbouring Uttar Pradesh, revised prices of several UK-origin liquor brands are expected on October 10, with reductions for some premium labels estimated at 5-15%.

Some UK-origin brands may become cheaper before any revision in state excise duty, meaning consumers are likely to see brand-specific changes rather than a uniform decline in prices.

The official said the Delhi Excise Department had directed wholesale liquor licence holders (L-1F) to apply for a revision of the maximum retail price (MRP) of imported liquor brands affected by CETA.