If Andhra can, why can't we, ask excise

Sep 19, 2011, 08:43 IST | Urvashi Seth

Sources reveal state excise department is considering taking over wholesaling of liquor, a la AP, and mulling stricter laws and harsher policies, to rake in the moolah

Sources reveal state excise department is considering taking over wholesaling of liquor, a la AP, and mulling stricter laws and harsher policies, to rake in the moolah

Looking at the cash-rich reserves of its counterpart in the neighbouring state of Andhra Pradesh, Maharashtra State Excise Department is scouting for ways to boost its proceeds from liquor. This time the excise ministry has sought suggestions from employees in the department itself, and from what sources tell us, the proposed ideas are not going to gel well with the common man's pocket.

On September 20, the ministry has called for a meeting of senior excise officials seeking ideas to generate more revenue.

"Excise Minister Ganesh Naik has called for a meeting on Tuesday to discuss ideas over how the department can earn more revenue from liquor. Already, recent taxes and a three-fold rise in liquor prices have brought down sales by 20 to 25 per cent over the last few months. People who used to drink Indian-made foreign liquor (IMFL) have been forced to shift to country liquor (CL). A further rise in prices or in other areas will put drinking out of the bounds of many," said a senior excise official, requesting anonymity.

The ministry wants to be at par with Andhra Pradesh government, where the government fully owns the liquor depots through AP Beverages Corporation. "The department is revisiting the idea of taking over the wholesaling of liquor in the state, along the lines of the AP government. As per the practice, the department will hold the sole rights of selling alcohol to retailers, which will haul in more revenue," said a senior excise official.

The idea faced backlash, but reportedly has been re-introduced.  

There are more contentious ideas on the cards (see box)

'We're fading out'
"Hotel industry seems to be now in a fading stage. Service tax in AC restaurants, VAT on liquor, and three-fold rise in its prices has created an alarming situation for the industry. Instead of thinking how the department can generate revenue, it should think of reducing prices to help the common man. We are tired of appealing to the government, deaf to our concerns," said Sudhakar Shetty, president Indian Hotel and Restaurant Association, an umbrella body of around 7,000 restaurants and bars.

A spokesperson from the Maharashtra Wine Merchants Association said, "The state is completely going the
Gujarat way, where drinking is prohibited but huge volumes of liquor enters the state, giving corrupt officials huge money."

Drinking in a bar has become a status symbol, thanks to all the taxes.
� Manish Paul, Bandra

I have shifted to beer as drinking hard liquor is out of my reach. I don't earn that much.
� Vandana Pai, Thane

In the offing?
Sources say the following ideas are being mulled to squeeze drinkers down to the last drop:
>> Rise in price of one-day party permit, or new licence fee for smaller parties 

>> Strict vigilance at the airport for people who are getting duty free liquor 

>> Following AP model, in which government takes over as a liquor wholesaler 

>> Enforcing drinking permit rules stringently, and fining offenders 

>> Promoting use of liquor for medicinal and toiletry purposes 

>> Reviewing various duties and taxes on liquor etc.

Govt's gravy train
Since the start of the current fiscal, the volume of liquor sold has gone down drastically - sale of IMFL by 15 per cent in city and 25 per cent in state. Sale of beer bottles dropped by 10 per cent across the state. And yet, remarkably, the excise department has witnessed a 40 per cent rise in revenue as compared to the last few years, coasting on the tax hikes.

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