Cheers for tipplers: Liquor quota goes up, rates may dip

₹1 bottling fee per litre introduced to fund alcohol de-addiction; new battalion to check smuggling from neighbouring states

CHANDIGARH : Going back on its promise to reduce consumption of liquor in the state and bringing cheers to tipplers, the Captain Amarinder Singh government hiked the quota for liquor to “curtail monopoly and smuggling” on Saturday. The quota of country liquor (PML) has been increased by 10% to 6.3 crore litres, Indian Made Foreign Liquor (IMFL) by 6% to 2.6 crore proof litres and beer to 3 crore bulk litres by 16%. Last year, the government had slashed liquor quota by 20-33%.

The new excise policy for 2019-20 that the state cabinet has approved also levies a bottling fee of ₹1 per litre to generate approximately ₹30 crore. “The finance department will allocate this amount for alcohol de-addiction,” a spokesman of the chief minister’s office (CMO) said.

“Since we have not hiked taxes and the number of contractors remains the same, the price of liquor is expected to come down due to increased competition,” said VP Singh, Punjab excise and taxation commissioner. The move to set up a state liquor corporation has been put on the back-burner.

After failing to meet high revenue target from excise, finance minister Manpreet Singh Badal, the architect of the promise to curtail booze, has set a target of ₹6,201 crore through the levy of state excise duty for the coming fiscal. This is an increase of 13% over revised estimates for the current fiscal.

To check smuggling of liquor from neighbouring states, where liquor is cheaper, an additional battalion comprising an IG/DIG of police with Sp-rank officers at divisional level, DSPS and 50-60 police staff for each excise district will be created for the department of excise and taxation.

To shore-up revenue, liquor bars have been brought under VAT under a composition scheme. The tax of 13% +10% surcharge will be levied on licensees who do not opt for the composition scheme.

Excise duty on retail for PML, IMFL and beer has been retained at the same level as last year. Under the new policy, the number of groups would remain the same (approximately 700) and the group size would increase only to the extent of anticipated increase in the revenue.

The concept of Mrp-linked ex-distillery issue price (EDP) of country liquor has also been introduced.

The government fixed it till last year. “With this, market forces will come into play and distilleries will be able to fix own rates of their brands,” the spokesman added.