Sula Vineyards shares slumped about 7 per cent during the early trading session on Wednesday after the recently listed company said it has received an order/notice dated July 31, 2023 passed by the Minister of State Excise Revenue. The leading wine producer has received an excise duty notice of Rs 116 crore from the Maharashtra excise department.
This comes after the minister (State Excise Revenue) vacated the interim stay granted on the demand notice issued by the Nashik collector for recovery of excise duty from Sula Vineyards.
However, Sula Vineyards in an exchange filing said, “It may be noted that the Order does not affect the existing business or the activities of the Company. The Company has always strived to and carried out its business in compliance with extant laws and regulations in letter and spirit.”
The demand notice was received by the company on the grounds that under the Maharashtra Manufactured Beer and Wine Rules, 1966, excise duty was recoverable on wine produced or manufactured from grapes produced in Maharashtra by blending wine brought from across the customs frontier or from other states, Sula vineyards said.
Following the update, shares of Sula Vineyards cracked about 7 per cent to Rs 481.85 on Wednesday, before making a mild recovery. The company’s total market capitalization barely managed to hold Rs 4,000 crore. The scrip had settled at Rs 516.25 on Tuesday.
Further, the company said it immediately filed a writ petition on August 1, 2023, before the High Court of Bombay, challenging the order. The company has been legally advised that the demand notice is not tenable in law, it said.
Incorporated in 2003, Sula Vineyards is India’s largest wine producer and seller. The company also distributes wines under a bouquet of popular brands. The company was listed at the bourses in December 2022, when it raised Rs 960.35 crore via IPO route by selling its shares for Rs 357 apiece. The scrip is currently 35 per cent above its issue price.
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