Kerala decides to hike Indian-made foreign liquor prices

South India
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The liquor shops are expected to be opened on May 18, when the current phase of the lockdown will end.

As a prelude to reopening liquor shops closed in the wake of lockdown from March 25, the Kerala government has effected a steep hike in the prices of Indian-made foreign liquor (IMFL).

A cabinet meeting chaired by Chief Minister Pinarayi Vijayan on Wednesday, May 13, approved a 10 to 35 percent hike on the price of all liquor brands, wine and beer besides introducing a Covid cess on liquor.

According to the decision, the price of premium brands of all IMFL products will go up by 35% from its current price. The cabinet has also decided to issue an ordinance for hiking the price of liquor sold in the state.

“The state is in acute financial crisis after the lockdown and lost around Rs 2,100 crore as excise duty on liquor after bars and BEVCO outlets closed down in the past 50 days of lockdown,” a senior excise official was quoted by India Today as saying.

However, the government has not yet taken a decision on opening the retail liquor outlets run by the Beverages Corporation and Consumerfed and bars and wine parlours. The government delayed the decision on opening liquor outlets to check further spread of coronavirus infection as large crowds can assemble in front of liquor outlets.

The state government has now decided to introduce a virtual queue system for the state-run 365 BEVCO outlets and 35 ConsumerFed shops for sale of liquor. Bars will also be allowed to open along with BEVCO outlets and will be allowed to sell liquor as parcels.

Liquor outlets in the state are likely to be opened on May 18, after the third phase of the nationwide lockdown is scheduled to end. Kerala is a tipplers’ paradise and it comes second in the country after Punjab in terms of per capita liquor consumption.

Statistics show liquor remains one of the highest revenue earners of the state—on an average the government-owned Beverages Corporation sells liquor worth Rs 35 to 40 crore a day and in 2018-19 it sold bottles worth Rs 14,508 crore, according to a report in Hindustan Times.

At present, the sales tax on Indian-made foreign liquor (IMFL) is 202% for brands costing up to Rs 400 and 212% for brands costing above Rs 400. With the new rates kicking in, these would be revised to 237% and 247% respectively. With regards to beer and wine, the new rate of sales tax will be 137%.

 According to top finance department sources quoted by Times of India, the increase in sales tax, despite the losses in sales caused due to the lockdown, will fetch an additional Rs 2000 to Rs 2500 crore to the state exchequer in the ongoing financial year.

Image Credit: Indian express

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