The Commerce ministry has suggested restricting the purchase of tax-free alcohol to one bottle at duty free shops. The ministry also recommended to its finance counterpart that purchase of cigarette cartons at duty free shops should also be prohibited. These recommendations are part of proposals made by the commerce ministry for the upcoming budget which would be unveiled by Finance Minister Nirmala Sitharaman on Feb 1. Currently, inbound international passengers are allowed to buy two litres of alcohol and a carton of cigarette 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. This suggestion assumes significance as the government is looking at various ways to curtail import of non-essentail goods into the country to rein in trade deficit. A duty-free shop is where an inbound international passenger can generally purchase goods worth Rs.50,000 without paying any import duty. The commerce ministry has also suggested increase in custom duty for products like paper, footwear, rubber items, and toys. The aim is to boost the manufacturing growth.