Basantapur Tinjure Company in Dhankuta has requested the government to provide an 80 percent excise duty exemption on wine produced from indigenous kiwifruit.
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The government has urged Dhankuta to provide an 80 percent excise duty exemption to those who produce and process kiwifruit and produce wine. Basantapur Tinjure Company (Kiwi Production and Processing Center), which has come into operation in Dhankuta by bringing together farmers from seven hilly districts of Koshi Province, has demanded a special tax exemption from the government to save the indigenous fruit-based wine industry. The industry has demanded an 80 percent exemption on the excise duty levied on wine produced from indigenous raw materials (kiwifruit). According to the
company, it has been cultivating kiwifruit commercially on its own land of about 100 ropanis and about 400 ropanis of land belonging to 65 local household farmers. The industry has been purchasing and processing kiwifruit from farmers in Ilam, Panchthar, Tehrathum, Sankhuwasabha, Bhojpur, Khotang and Dhankuta in Koshi Province.
The government had introduced an 80 percent excise duty exemption on beverages containing 12 to 17 percent alcohol made from indigenous fruits through the budget for the fiscal year 2073/74. But from 2075/2076, the same excise duty has been imposed on both imported and indigenous products.
Industry President Durgamani Poudel said that local industries have been hit by the imposition of the same tax rate on wine made from indigenous and imported fruits. According to him, the production cost of producing 1 liter of wine costs only Rs 921. He said that if a liter of wine can be sold for more than Rs 1,400, there will be a profit. 'To produce 1 liter of wine, it costs a total of Rs 921 including excise duty (Rs 460), raw materials, bottles, workers and 13 percent VAT,' he said.
He claims that the price will increase further when transportation and bank interest are added to the production cost, and the price will not be able to compete with imported wine in the market. The industry has demanded that the government provide an 80 percent discount on excise duty through the upcoming budget and keep the price at only Rs 120 per liter.
'We have to pay more than 60 percent of the production cost as tax,' the industry said in a statement. 'The government should provide an 80 percent excise duty discount as per the old policy for farmers making wine from indigenous fruits. If the excise duty is maintained at only Rs 120 per liter, the indigenous industry can be revived.'
Since kiwi cultivation starts production only after 5 years and bears fruit for 50 years, farmers have a huge investment in it. If the government does not encourage the processing industry, farmers will not get a fair price and their investment will be wasted.
He said that if an industry based on indigenous fruits can be established, local employment will be created, the use of barren land will increase, and the country can become self-reliant by replacing imports. He said that the 'Tinjure Bagan' brand of Kibi wine will be launched in the market from the next fiscal year.
