Maharashtra turns to liquor to fill coffers

MUMBAI: Unable to meet its tax collection targets, Maharashtra government is hoping to raise its sagging spirits with the help of liquor. Foreseeing a big shortfall in the tax collection targe

Published: 18th March 2012 11:10 PM  |   Last Updated: 16th May 2012 06:38 PM   |  A+A-

MUMBAI: Unable to meet its tax collection targets, Maharashtra government is hoping to raise its sagging spirits with the help of liquor. Foreseeing a big shortfall in the tax collection targets, particularly from the excise department that entirely depends on sale and consumption of liquor for earning its revenue, government desperately wants more consumption of liquor, which would result in more tax earned.

However, senior bureaucrats realised that coming in the way of their revenue goals was another wing of the state government—the police department. Chief Secretary Ratnakar Gaikwad recently shot a letter to the Director General of Police. He wanted the police to stop booking liquor licence holders (restaurants, bars, pubs) under the Maharashtra Liquor Abolition Act (1949).

In Maharashtra, a permit is not just required for drinking liquor in a public place but also to carry it from wine shop to anyplace such as a person’s residence. The permit is easily available for persons above the age of 25 years and is nominally priced. The daily permit priced `5 for Indian Made Foreign Liquor (IMFL) and `2 for country liquor are available at the restaurants and bars itself. While annual permit for `100 and life-time permit for `1,000 are available from the offices of excise department on production of age-proof and a certificate from the doctor saying that the person is required to consume alcohol on health grounds. One of the reasons restaurants and bars do not encourage their customers to get the permits is that it may indicate the quantum of liquor sold which they may not want to reveal to cheat on taxes.

The police know the tactics indulged by those selling and serving liquor and have been rigorously booking them for violation of permit conditions under Liquor Abolition Act.

“The police would just walk in to a fine dining restaurant and demand permits from those sitting with their family members and consuming liquor. The interaction with the police leaves a very bad taste on the customers who would either not return to the restaurant or not consume liquor again in such a place,” said Sudhakar Shetty, president of Hotel Owners Association. Shetty alleged the police action is merely tactics to put pressure on restaurants and bars to part with the bribe money.

According to the chief secretary, taking action under sections of Liquor Abolition Act for violation of permit conditions falls purely in the purview of the excise department and not the police who register an FIR and prosecute the offenders as criminals in a court of law. On the other hand when the excise department takes action against permit violators, they pursue it purely as an economic offence. The excise department’s action is wound up after payment of ‘adjustment charges’ which in turn are a major source of revenue. The pending criminal cases initiated by the police impede the collection of ‘adjustment charges’. Gaikwad, citing several government notifications and High Court judgments, has asked the police chief to convey to his subordinates that in case of permit violations, the police should pass on the information to the state excise department.

“The police may be one of the reasons and not the only one for decline in liquor consumption. The cost of IMFL in Maharashtra is three times that of neighbouring Goa. Exorbitant costs are keeping people away from liquor and along with it police action may also have played some role,” said a highly placed police officer.

In Mumbai, the sale percentage of IMFL compared to the previous years has reached negative figures. While sale of IMFL dipped to -8.56 per cent, beer also plummeted to -7.98 per cent. In the suburbs of Mumbai on western and eastern side, liquor sales this year declined by 26.8 lakh litres compared to last year. Similarly in South Mumbai, the figures came down by 13.2 lakh litres. No wonder, the state believes the solutions lies in the hands of those who down a drink to forget their own woes.


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