States see higher tax revenue in third phase

NEWDELHI: Revenue collections of states have shown signs of recovery during the third phase of the Covid-19 lockdown with a higher collection of excise and Goods and Services Tax (GST) as industrial activities have increased and many government offices have resumed work, multiple officials across the country said.

State governments last month reported a revenue dip of up to 90% and triggered fears that many of them may be unable to pay salaries for April. The relaxation in lockdown norms this month and the resumption of liquor sales have since boosted the revenue collections.

Almost all states except Kerala, which have higher per capita liquor consumption, have allowed alcohol sales. Kerala has increased the tax on liquor ahead of the resumption of its sale from May 18. Punjab opened its liquor vends on Thursday.

The officials cited above said the revenues, however, remain much less than what the states usually collect. The revenues from alcohol sales have also fallen after an initial rush at liquor shops once they were opened. Several officials said they were awaiting the Centre’s help in bridging the revenue gap, which is expected to continue because of a huge dip in demand.

Haryana, where liquor sales were allowed from May 6, earned a revenue of ~ 93 crore till May 12 from them, state officials said. Officials said the stamp duty has also increased from May 1. “We expect better revenue from May 18 when the lockdown is expected to apply only to the containment zones,” said a Haryana official.

Uttar Pradesh has reported liquor sales worth ~665 crore since May 4 when the state allowed them. State excise department officials said it is around ~250 to ~300 crore less than the sales recorded during the same period last year. Liquor sellers have appealed to the state for more relaxations like not paying license fees during lockdown.

Revenue from liquor sales in Maharashtra, the worst-hit state by the pandemic, from May 4-12 was half of what it earned during the same period last year. Officials said this was because restaurants and bars have remained closed and liquor sales were happening only through vends.

Officials in Karnataka said there has been a jump in GST and other revenue collection. They said revenue from liquor sales was now back to the normal level of ~50-60 crore daily.