BENGALURU: The liquor industry heaved a sigh of relief when Chief Minister Basavaraj Bommai, in his maiden budget speech on Friday, announced that there would be “no increase in tax for 2022-23” but when he spelt out the revenue target of Rs 29,000 crore for the Excise department for the said FY, the industry could see the writing on the wall.
“The unprecedented jump of Rs 4,420 crore from Rs 24,580 crore, which was the previous year’s revenue target, is unrealistic without increase in Additional Excise Duty (AED) on alcohol, even if they improve sales,” said sources on condition of anonymity.
Bommai, addressing the media soon after presenting the budget, said with the economy back to pre-Covid days, he is optimistic about revenue generation. “Last year was a pandemic year. We hope to do better this year in terms of revenue generation. We will also plug any pilferage,” he had responded, while addressing a media query on the hike in Excise revenue target. The department contributes over 20 per cent revenue to the state exchequer.
This is the first time that the revenue target of State Excise has seen such a sharp jump in the history of the department, added sources. A look at revenue targets of the department in the last few years show a gradual increase, ranging between Rs 1,000 crore and Rs 1,500 crore every year. The hike this time is close to 18 per cent over the previous year, which is the highest.
The annual financial target for 2020-21 was Rs 22,700 crore, and Rs 24,580 crore for 2021-22. For 2019-2020, it was kept at Rs 20,950 crore and Rs 19,750 crore for FY 2018-19. Alcohol in Karnataka is priced and taxed according to its slab. There are 18 Excise slabs, with the cheapest alcohol falling in the first slab, and the most expensive Indian Made Liquor (IML) in the 18th slab. “The AED on expensive alcohol in Karnataka is the second highest in the country, and lowest for cheapest liquor,” sources added.
There are over 10,097 Excise licencees in the State. They had made several representations to the government requesting not to hike AED this year, citing business losses in the two consecutive pandemic years.