BENGALURU: The State government is likely to exempt alcohol from any fresh taxes or hike in duty in the forthcoming Budget.According to sources, the Chief Minister may not announce any increase in the Additional Excise Duty (AED) on Indian Made Liquor (IML) because any further increase in liquor prices may boomerang on the government as it may “encourage sale of seconds or non-duty paid liquor and other illegalities,” the sources added.
The government had twice raised the AED in 2020. An increase of 6 per cent on the AED on all slabs of IML was announced in the Budget last year just before the pandemic lockdown. In May, the government had again raised the AED by another 11 per cent, two days after the retail liquor stores (CL2) and State-run MSIL (CL-11C) stores were allowed to sell liquor from May 4 in areas that were outside the containment zones.
The objective behind the steep and unprecedented hike in the AED that had pushed the maximum retail price (MRP) of alcohol was to mop up Rs 2,500 core revenue that was lost during the total shutdown of about 40 days during the first lockdown. After registering a negative growth, the State excise revenue for 2020-21 has recently gone up marginally in comparison to 2019-20, largely because of the increased AED. The sale of IML and beer continues to be low in comparison to the previous year.
As on February 8, the excise revenue collection was Rs 19,300 crore, said official sources. “We will be able to reach our revenue target ofRs 22,700 crore for 2020-21 by March 31,” they added. Between April 2020 and January 2021, the excise revenue had registered a gain of 3.38 per cent in comparison to the corresponding period in the last fiscal when the revenue target was kept at Rs 20,950 crore.