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Alcohol makers urge Delhi govt to lower 70% liquor cess as sales dip

The organization claimed that the high tax rate is drastically affecting the sale of alcohol in the national capital. It wants the government to bring down the cess to a 'realistic and sustainable' level

twitter-logoBusinessToday.In | June 4, 2020 | Updated 14:26 IST
Alcohol makers urge Delhi govt to lower 70% liquor cess as sales dip
The Delhi government put 70% corona fee on sale of alcohol

The Confederation of Indian Alcoholic Beverages Companies (CIABC) has demanded that the Delhi government lower the 70% special corona fee that was put on sale of alcohol during the coronavirus lockdown. The organization claimed that the high tax rate is drastically affecting the sale of alcohol in the national capital. It wants the government to bring down the cess to a "realistic and sustainable" level.

The liquor manufacturers' association has told The Times of India that the sale of alcohol in the national capital dropped by 58% compared to what it was last year. Alcohol sales of neighbouring states like UP and Haryana seem to be bouncing back as there was only a 10-15% additional tax imposed on alcohol in these states.

According to the daily, in a letter to deputy CM Manish Sisodia, CIABC Director-General Vinod Giri claimed that national capital's alcohol business was slowly shifting to Haryana and Uttar Pradesh due to the difference in retail prices caused by taxes.

CIABC is an apex body of the alcoholic beverage industry and its members include major companies manufacturing and marketing their products in India and abroad.

Back in May, the Delhi government had imposed a 70% corona fee on the MRP on all types of liquor. By the end of May, the excise department had witnessed a total sale of liquor worth Rs 234 crore, which totalled up to Rs 150 crore in corona fees and almost the same amount as excise duty.

Giri told the daily that in early May he had advised the government that the corona fee on liquor would prove counterproductive in the longer run. "If imposed for long, it will lead to a fall in sales, and, hence, government revenue. The initial rush at liquor shops was misleading. The pent-up demand due to one and half months of lockdown was too high for 20% of the shops that had opened at that time," he added.

According to the daily, the sale of liquor is also down in Andra Pradesh as they had also imposed a similarly high corona fee of 75%. "With lockdown restrictions easing up, interstate traffic will become easier, further aiding unlawful smuggling of liquor to Delhi," Giri said.

Giri argued that bringing down the cess to a realistic level would benefit all stakeholders including the government.

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