BENGALURU: Under pressure to scale up revenue collection and mobilise resources, the state government is reportedly mulling auctioning defunct CL-2 (retail liquor shops) and 11-C (government-owned Mysore Sales International Limited retail outlets) licences, said sources.
“There are around 200 CL2 licences and 263 MSIL licences in the state, which are lying defunct. The government is taking a call on these licences and may think of auctioning them. No decision has, however, been taken in this regard so far,” added the sources.
In Karnataka, new CL-2 and CL-9 (bars & restaurants) licences were issued in 1992.
The MSIL licences were issued in two batches — in 2009 and 2016 and thereafter there was a freeze on these licences. In the absence of new fresh licences (CL-2, CL-9), the old ones have become the proverbial golden geese for the original licencee.
“The liquor licence racket in Karnataka is mind boggling and the government is the biggest loser. There is, however, no thought or discussion on issuing new excise licences. The reason behind auctioning the defunct licences is to bring them into the market and raise revenue for the state,” added the sources.
The excise revenue target for 2024-2025 is Rs 38,525 crore, of which the department has collected Rs 31,891 crore as on February 23. “The hope is to collect Rs 36,000 crore by March 31. The market is saturated and there is hardly any scope to push it any further,” added the sources.
Meanwhile, distillers have requested the government to raise their selling price in the first three slabs (with lowest MRP) of IML by Rs 100 per case, citing severe losses.
One case comprises around nine litres of liquor. “We have not received any revision in our selling price in the last 10 years after it was revised in 2015-2016 by Siddaramaiah during his first tenure as CM,” said industry sources. They explained that the total input cost per case box (in the first two slabs) has gone up by Rs 120.
“We have requested the government for a marginal hike of Rs 100 per case box to cover the costs. We are selling to Karnataka State Beverage Corporation Ltd at Rs 450 and Rs 500 per case in these two slabs over the last decade. Now because of inflation, we will not be able to sell at this rate,” they added.
The first three slabs contribute around 72% of the entire industry volume where “maximum suppliers are Indian distillers”, said sources.
Sources in the food & beverage (F&B) industry said they expect that “no new taxes should be levied on beer and IML in the forthcoming state budget on March 7. There should be ease of doing business. There are far too many licences to apply for in Karnataka to set up business, and red tapism makes it worse,” charged industry representatives.