Sula Vineyards‘ share price was gaining momentum on Friday going up over 14% to hit an all-time high of ₹567.95.
What Happened: The massive surge today comes as the Maharashtra state government has made a significant decision to revive the Wine Industrial Promotion Scheme (WIPS). The scheme, aimed at promoting the wine industry, has been reinstated for five years, and the announcement was made during the state cabinet meeting led by Chief Minister Eknath Shinde.
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The decision to revive WIPS is driven by the government’s consideration of the interests of grape growers. Originally introduced in 2009, WIPS is an incentive scheme designed to encourage the wine industry in Maharashtra. Wineries are subject to a 20% value-added tax (VAT), of which 16% is refunded as a rebate under WIPS. The scheme had been temporarily halted in June 2020 due to financial constraints arising from the COVID-19 lockdown but has now been resumed.
The decision to revive WIPS for five years aligns to support grape-growing farmers in the state. The scheme has faced opposition in the past, with senior ministers from the Bharatiya Janata Party (BJP) expressing concerns about its implications. However, the state cabinet’s recent approval not only allows the revival of WIPS but also includes the refund of the rebate to wineries that have been paying 20% VAT under the scheme for the last four years (2020-21, 2021-22, 2022-23, and 2023-24).
Price Action: Sula Vineyards’ share price was up 10.15% to trade at ₹548.25 in the late hours of trading on Friday.
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