State to hike price tags of hard liquor

After beer, it might be Indian Made Foreign Liquor's (IMFL) turn to become costlier. A senior state excise department official said that the department is planning to hike the excise duty on hard liquor, which covers alcoholic drinks such as whiskey, gin, rum and brandy, to generate more revenue.

"At present, the tax structure for IMFL is three times the manufacturing cost declared by the producer or Rs 300 per proof litre of alcohol, whichever is higher. We are planning to hike these rates," he said. The official said the quantum of the increase was being finalised. An official noted that Maharashtra followed a pattern of discouraging consumption of liquor by ensuring high prices through a heavy tax structure.

This had led to the brew being smuggled in from neighbouring states and union territories such as Madhya Pradesh, Goa, Diu and Daman, and even from far off Punjab and Haryana where the excise duty regime is more liberal. A hike in duty rates and consequent rise in MRPs may add to the margins for those involved in the trade, which necessitated better enforcement by the department and the police.

"The increase in excise duty may also lead to a fall in sales," he added. This month, the department hiked the excise duty on mild and strong beer by 25% and 35%, which may increase the MRP by Rs 5 and 6.5 per 650ml bottle respectively.

Incidentally, liquor sales have shown a decline this year.

From April to September 2017, country liquor sales in Maharashtra stand at 1,469.63 lakh bulk liters (LBL) as against 1,591 LBL for the same period in 2016 – that's a fall of 7.63%. IMFL offtake stands at 14.33% less at 795.46 LBL against the previous 928.53 LBL. Beer and wine sales have declined by 16.52% and 13.04% respectively to end at 1,425 LBL and 25.88 LBL versus 2016's 1,707.28 LBL and 29.76 LBL.

The State excise department is the third highest revenue source for the Maharashtra government after State Goods and Services Tax (GST) and stamp duty and registration fees. For 2017-18, the state excise has a target of Rs 14,340 crore of which just 39.46% (Rs 5,659.1 crore) has been met by September.

In 2016-17, beer sales fell by 0.95% to end at 3,285.78 lakh bulk liters (LBL) against 3,317.32 LBL in the previous fiscal. IMFL sales increased by 2.99% at 1,930.53 LBL compared to 1,874.51 LBL in 2015-16 and CL consumption rose by 2.41% to 3,254.51 LBL against 3,177.83 LBL. Wine sales grew from 61.57 LBL to 64.70 LBL (5.09%).