Liquor Business Fizzles Out In AP, Thanks To EC Curbs
There has been a dip on the production of several brands of Indian Made Foreign Liquor (IMFL) and Beer at the distilleries and breweries as there was a halt in Government depots lifting huge stocks, with the Model Code of conduct coming into place.
The results of this were a huge dent in the revenue to the state exchequer in the form of excise duty. The excise duty imposed by the state government on liquor is to the tune of 22% and an additional excise of 10% and a value-added tax of 55%.
The excise duty on liquor ranges from Rs 40 to a maximum of Rs 110 per proof liter based on quality. A proof liter is the quantum of alcohol in a given quantity of liquor or beer. For instance, in a 650 ml beer, alcohol quantity will be nearly eight percent and it varies depending upon the variety of beer.
At an average, the State Government earns Rs 17,000 Crore per anum as revenues from liquor trade, out of which the excise duty will be nearly Rs 5,000 Crore, while the VAT comes up to Rs 9,500 crore which goes to the Department of commercial tax.
The remainder of Rs 2,500 crore will be the share of manufacturers as they invest to make liquor and beer and earn a profit within that limit only.
After the Model Code of Conduct was imposed and came into effect on March 10, there have been curbs in the liquor sale. This will be seen till 6 pm on April 11, which is scheduled to be the day of the elections.
As the curbs on the lifting of stocks last for nearly 32 days, from March 10 to April 11, it will have a significant impact on the quantum of excise duty and VAT paid to the departments concerned. However, once the curbs are lifted on the quantum of the sale of liquor, after the conduct of polling, based on demand and supply in the market, manufacturers will produce the liquor and release it into the market while retailers sell accordingly.
A state excise top official said: “As curbs are imposed on the quantum of the sale of liquor and beer as part of the poll code, the quantum of excise duty and VAT paid to the government comes down slightly for those days where curbs are in force. However, normalcy in the collection of taxes will be restored, once curbs are lifted after completion of the conduct of polls.”
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