People buy liquor from a wine shop at Shiv Puri in Delhi (file photo)
NEW DELHI: Claiming that the sale of liquor sale had “fallen drastically” due to the levy of 70% special corona fee, Confederation of Indian Alcoholic Beverage Companies (CIABC) on Wednesday demanded the cess be brought down to a “realistic and sustainable” level.
The liquor manufacturers’ body claimed that Delhi’s liquor sale in May had dropped by 58% compared with the same period last year, while neighbouring Haryana and Uttar Pradesh seemed to be bouncing back in sharp contrast where only 10-15% additional tax was imposed.
In a letter to deputy CM Manish Sisodia, who holds charge of excise department, CIABC director general Vinod Giri claimed that Delhi’s business was slowly shifting to Haryana and Uttar Pradesh due to the high difference in retail prices.
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.
Delhi government had imposed 70% special corona fee on the Maximum Retail Price (MRP) of all the categories of liquor in the first week of May. Till May 30, the excise department saw a total sale of Rs 234 crore, which fetched it about Rs 150 crore as corona fee and almost the same amount as excise duty.
Giri said he had raised concerns in the first week of May that the cess on liquor could prove counterproductive. “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.
Andhra Pradesh also imposed 75% tax and its sales dropped drastically. “With lockdown restrictions easing up, interstate traffic will become easier, further aiding unlawful smuggling of liquor to Delhi,” Giri said, adding that bringing down the cess to a realistic and sustainable level will benefit all stakeholders, including the government, companies and consumers.
A senior government official said the special corona fee was a temporary measure and the tax structure would be reviewed soon.