Ahead of Union Budget 2020-21 on 1 February, the Commerce Ministry has issued a dampener for foreign travellers. The ministry has proposed restricting purchase of liquor at duty-free shops to one bottle.
The recommendations to Finance Minister Nirmala Sitharaman include restricting purchase of tax-free alcohol to one bottle at duty-free shops as part of steps to reduce import of non-essential goods, sources said, according to a PTI report.
Commerce ministry recommends restricting purchase of tax-free alcohol to one bottle at duty-free shops as part of steps to reduce import of non-essential goods: Sources.
— Press Trust of India (@PTI_News) January 19, 2020
The ministry has also recommended to its finance counterpart that the purchase of cigarette cartons at duty-free shops should be prohibited, they said.
Currently, inbound international passengers are allowed to buy two litres of alcohol and a carton of cigarettes from these shops.
According to sources, there are countries that allow only one litre of liquor to international passengers and the same practice can be adopted in India.
While countries have been opening up controls for the last couple of years there have been tendencies of protectionist trade policies, even in large economies like the United States, an IANSe report said.
This suggestion from the Commerce Ministry assumes significance as the government is looking at various ways to curtail import of non-essential goods into the country to rein in trade deficit.
A duty-free shop is where an inbound international passenger can generally purchase goods worth about Rs 50,000 without paying any import duty.
The Commerce Ministry has also suggested an increase in customs duty on several products like paper, footwear, rubber items and toys to promote 'Make in India' and boost manufacturing growth, sources said.
The ministry has proposed rationalisation of basic customs or import duty on over 300 items from different sectors, including furniture, chemicals, rubber, coated paper and paper boards.
--With inputs from agencies
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Updated Date: Jan 23, 2020 19:14:07 IST