BENGALURU: Pressed for finances with economic activities coming to a grinding halt during the Covid-19 lockdown, the Karnataka government on Wednesday decided to increase revenue generation through a hike in excise duty. While Chief Minister BS Yediyurappa on Wednesday morning announced a hike of 17 per cent in the duty on liquor, the excise department later in the day issued an order on a hike in taxes in three slabs. The increased prices, with a hike of 17%, 21% and 25% duty, will come into effect starting Thursday.
“Excise duty has been increased in three slabs and the expected additional revenue is pegged at Rs 2,530 crore, over and above the target announced in the State budget,” said Excise Commissioner Yeshavantha V. The additional revenue from the hike in excise duty is expected to cover costs of the Rs 1,610 crore economic relief package that the State government announced on Wednesday. The order copy of the price hike deemed it a necessity, given the “exceptional circumstances arising out of the Covid-19 pandemic”.
The hike will apply to Indian Made Liquor under the bracket of brandy, whisky, gin, rum etc and not beer, wine, toddy etc. Liquor sold at prices up to Rs 559 will see a hike of 17% per bulk litre, IML priced between Rs 600 and Rs 1199 will see a hike of 21%, while liquor in the Rs 1200 - Rs 15,000 price range and above will see a hike of 25%.
In its March budget, the State government had hiked excise duty on liquor by 6% across all 18 slabs. Wednesday’s hike is inclusive of the announcement made in the budget. The excise department’s revenue target for 2020-2021 was fixed at Rs 22,700 crore. The further hike in excise duty is expected to increase revenue by another Rs 2,530 crore. Excise accounts for about 18 per cent of Karnataka’s own tax revenue.