KOLKATA: Within a fortnight of a drop in beer prices, here comes a party spoiler. Come November 1 and the prices of India-made foreign liquor (IMFL), imported liquors and other hard liquors are likely to go up further. Sources said the price hike from the current level could be in the range of 10%-20% depending on the brand. The increase will translate into a steep rise of 40%-50% from the pre-Covid level.
The state government, like many other state governments, had imposed 30% Covid tax on all liquor, including beer, from April 7. This had led to a 35%-40% drop in IMFL demand and over 85% fall in beer demand. In mid-August, the state excise department had decided to abolish the Covid tax and in lieu decided to introduce a slab-based ad-valorem structure. The new tax structure was proposed to be based on ex-distillery price.
The new tax structure is based on ex-distillery price (EDP) and ex-brewery price (EBP). There would be 16 slabs based on declared EBP of beer while for IMFL there would be 22 slabs based on declared EDP. “The declared EDP and EBP should not be more than that of other states and if it is higher, the company has to explain the justification as per the new structure,” sources in the liquor industry said.
The new structure was supposed to be implemented from September but it was kept in hold following apprehension of a further price hike by liquor companies and liquor bodies. However, some tinkering was done with the structure in beer earlier this month, following which there was a huge fall in both prices of lager as well as strong beer.
The director general of Confederation of Indian Alcoholic Beverage Companies (CIABC), Vinod Giri, told TOI that it had still not agreed with the new structure for hard liquors. Giri had earlier welcomed the fall in beer price. But on the impending hike in liquor price, he felt that it would be detrimental for the industry and even the revenue of the state government.
The Indian alcoholic beverage industry had already raised an alarm over the new taxation structure for sale of liquor in Bengal and urged CM Mamata Banerjee not to make any changes in the tax structure in the current fiscal.
In a joint representation to CM in September, the Confederation of Indian Alcoholic Beverage Companies and the International Spirits and Wines Association of India had said that if the taxation structure was changed for IMFL just before the festivities, it would prove to be counter-productive both for the government and the industry.