Wine- Drink, Liquor Shop Open In Lockdown.

Liquor Shop Open In Lockdown

 How  much sales revenues does the states generate from selling alcohol?

 What liquor sales revenues mean for states and how they are planning for ‘an additional revenue boost’ amid COVID-19?

Liquor and States

·         Manufacture and sale of liquor is one of the major sources of states’revenue,and the reopening comes at a time when the states are struggling financially amid the disruptionon account of the lockdown.

·         Liquor contributes huge profit to the exchequers of states and UTs except Gujarat and Bihar (enforced prohibition).

·         Nagaland had prohibited (Nagal and Liquor Total Prohibition(NLTP)Act,1989)the sale of India-made foreign liquor (IMFL) but local brews like‘zutho’are exempted from the prohibition.

Liquor and States

·         States levy‘excise duty’on manufacture and sale of liquor.

·          Some states, like TamilNadu, also impose VAT (value added tax).

·          States also charge special fees on imported foreign liquor; transport fee; and label & brand registration charges.

·          A few states,such as Uttar Pradesh,have imposed a“special duty on liquor” to collect funds for special purposes, such as maintenance of stray cattle.

What is Excise Duty?

·          Excise duty is a form of tax imposed on goods for their production,licensing and sale.

·         It is an indirect tax paid to the Government of India by producers of goods (called Union Excise Duty).

·         Excise duty is the opposite of Customs duty in that it applies to goods  Manufactured domestically in the country, while Customs is levied on those coming from out side of the country.

·         The Goods and Services Tax (GST), introduction in July 2017, subsumed  many types of excise duty. Today,excise duty applies only on petroleum and liquor.

Why Liquor Was Kept Outside GST ?

·          On an average, the states collect more than Rs 15,000 crore per month from excise on liquor (as per budget prediction for2019-20). This projection was before the COVID-19 out break.

·          Alcohol accounts for around10-15 percent of Own Tax Revenue of a majority of states.

·         Infact, state excise duties on liquor is the second or third largest contributor to the category State’s Own Tax revenue; GST is the largest.

·         This is the reason states have always wanted liquor kept out of the purview of GST.

State with Highest Revenue from Liquor

·         The five states that collected the highest revenue from excise duty on liquor were:

·          Uttar Pradesh (Rs. 25,100 crore),

·          Karnataka (Rs. 19,750 crore),

·          Maharashtra(Rs. 15,343.08 crore),

·          WestBengal(Rs. 10,554.36 crore),

·          Telangana(Rs. 10,313.68 crore).

Some facts related to alcohol consumption habit in India

·         Alcohol consumption in India increased by 38 percent—from 4.3 to 5.9 litres per adult per year,between 2010 and 2017.

·          Nearly 57 million (5.7 Crore) Indians are addicted to alcohol, according to a 2019 study by the All India Institute of Medical Sciences (AIIMS).

·          According to a government survey conducted in Feb2019, about 14.6 percent (16 crores) people in the age group of 10 to 75 years consume alcohol.

·          The state like Chhattisgarh,Tripura,Punjab,Arunachal Pradesh,and Goa dominate in the liquor consumption.

Highest Consumption of Alcohol

The ten countries with the highest consumption of alcohol (in litersof pure alcohol per capita) are:

• Belarus (14.4 liters)

• Lithuania (12.9 liters)

• Grenada (11.9 liters)

• Czech Republic (11.8 liters)

• France (11.8 liters)

• Russia (11.5 liters)

• Ireland (11.4 liters)

• Luxembourg (11.4 liters)

• Slovakia (11.4 liters)

• Germany (11.3 liters)