The commerce and industry ministry has proposed to reduce the number of alcohol bottles and cigarette packets that a passenger can buy at duty-free outlets when returning from an overseas trip, while also seeking a cut in the value of goods and gifts that one can get in without paying duty, which is currently fixed at Rs 50,000. While the number of alcohol bottles that can be bought from duty-free outlets is proposed to be halved from the current two, the number of cigarette sticks that could be bought was earlier reduced from 200 to 100. It is now proposed to be slashed further. Although a final decision is yet to be taken, the move has triggered massive criticism as flyers shop for their favourite brand of whisky or cigarettes at duty-free shops, which are not just seen to be genuine but also cost less.
While data is unavailable, the amount of such imports is not seen to be significant. Commerce and industry minister Piyush Goyal confirmed the recommendation and said the move was meant to restrict the entry of sin goods and also align Indian rules with global standards. “It’s not a question of large or small (quantities). Even under GST, while alcohol is not included, tobacco is a sin good. As a nation, we are not encouraging the import of alcohol,” he told TOI in an interview, while listing out the permitted quantities in other countries. “All that we have done is highlighted that these are global best practices. I am not sure if India can afford to be so liberal, particularly when it relates to liquor and cigarettes,” the minister added. The recommendation, on which the finance ministry will have a final say, comes at a time when private Indian airport operators had sought a doubling of duty-free liquor allowance from two to four litres to bring airports on par with Thailand, Singapore and Dubai.
If Indian passengers purchase duty-free goods outside India, airports back home lose business. “Liquor allowance given in India is not on par with liquor allowance in neighbouring countries/Asia Pacific countries,” the Association of Private Airport Operators (APAO) said in its pre-budget submission. The lobby group argued that more duty-free business would mean more non-aero revenue and help keep aero revenues charged as airline tariffs and user fees which passengers pay at reasonable levels. While government officials said the key thrust was on restricting tobacco imports, many frequent flyers argued that the move was uncalled for, especially when India had record foreign exchange reserves and consumers were seeking better quality of life. What has prompted the government to seek a reduction in the overall duty-free import allowance is unclear as travellers usually get small quantities of chocolates, gifts and souvenirs for friends and family members.