This news is about the hike in excise duty on liquor in Karnataka from April 1. People from the state will now have to shell out more for a bottle of their favourite liquor, so read on to find out more. Bangalore prides itself to have one of the largest number of breweries in India. What can we say? Bangaloreans love their liquor as much as their coffee. But here’s where things might get a little tricky as liquor will soon get costlier from 1st April. The government of Karnataka has hiked the excise duty on liquor by 6%. This is done to deal with a crunch in funds from pending payments and a reduction in the state’s share under the Finance Commission’s calculations.
What’s In It?
The Chief Minister of Karnataka, B.S. Yediyurappa proposed to increase the existing rates of additional excise duty 6% across all 18 slabs. The Chief Minister also holds the finance portfolio and made this announcement in the state budget. The opposition leaders stated that liquor is one of the biggest revenue sources and this hike would impact the overall growth of the sector.
In the under ₹499 category, declared price per carton box, the proposed additional excise duty will increase from ₹144 to ₹153 per bulk litre. While Indian-made liquor priced at over ₹15,000 per carton box, will have an increased additional duty from ₹3,370 to ₹3,572 per bulk litre. The Chief Minister stated that this hike, effective enforcement and regulatory measures, would result in the department achieving the target of ₹22,700 crores fixed for the financial year 2020-2021.
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What’s More?
The target for the government when it came to the government’s revenue collection was set at ₹20,950 crores in FY20. The government has so far collected ₹19,701 crores. The revenue growth came down from 15.07% in June to 7.39% in July, to -0.57% in August, 6.45% in September and -1.58% in October, due to excessive floods that badly affected the excise revenue. Former minister and Congress legislator, Krishna Byre Gowda stated that the increase in excise duty on liquor is not a secure financial approach because there would be a drop in per capita consumption at some point in time. Did you know Women Friendly Liquor Shops To Be Set Up In Madhya Pradesh?
There might also not be an immediate price hike due to the current slowdown in the market and competition intensity in the liquor sector, according to analysts. This would impact margins. Gowda believes that the government is taking these actions as a way to cover up their losses imposed on Karnataka by the central government. Well, time will say whether this is true. But for now, millenials, get ready to open you shell out more for your bottle of liquor.