THIRUVANANTHAPURAM: If the latest hike in liquor duty were an indication, the state is relying more and more on drinkers to shoulder the revenue bills of the government. A source in the know of things at the government-run Kerala State Beverages Corporation (BEVCO), said the 7 per cent tax proposed on liquor brands from February 1 will bring in around Rs 950 crore to the exchequer annually.
Further, according to Excise Minister TP Ramakrishnan, around Rs 855 crore was collected as duty during the May 28 to December 31, 2020 period after the government hiked the duty on liquor in the wake of COVID.
The government is also expected to net Rs 1,518 crore as duty during this year, he said in response to a question in the assembly. With the new proposed hike of 7 per cent from February 1, the state government can net a total revenue of over Rs 3,500 crore annually.
The state had earlier hiked the duty on Indian-made foreign liquor (IMFL) by 35 per cent and 10 per cent for beer and wine, respectively taking the total tax on IMFL to a whopping 237-247 per cent from 202-212 per cent.
The new proposed 7 per cent hike will slap a tax burden of 244-254 per cent on those buying alcohol in the state. In layman terms, the new proposed hike of 7 per cent will effect an increase of Rs 10-90 on various brands.
Further, if an extra Rs 40 were to be charged per bottle of liquor on an average, the government will get a tax of Rs 35 from it while liquor companies will get a benefit of just Rs 4 and the corporation Rs 1.
Given the cost incurred by the government like footing the bills of ‘kits’ being distributed, which played a major role in ensuring a thumping victory for LDF in the local body elections, it is clear that the government is pinning hopes on revenue from alcohol sales to pay its bills.
The incumbent government has also opened as many as 182 new bars, taking the total number of bars in the state to 619, after the previous UDF government had shuttered 748 bars.