Bar hotels to remain shut from Monday

Thiruvananthapuram: Bar hotels in state have decided to down shutters from Monday citing that the increased profit margin granted to beverages corporation (Bevco) by the government on the liquor sold by it to the bar hotels would push them to heavy losses.
Bar hotels cited that since they are allowed to sell only at maximum retail price (MRP) when they sell liquor as takeaway parcels, they will end up with losses, unlike the case when they are allowed to serve liquor on their premises. When liquor is allowed to be served in the premises of bar hotels, the bottles are not sold at MRPs, but using peg measures at higher rates than MRP.
As per bar hotels association sources, bars roughly make Rs 150 as profit per Rs 1,000. From this, Rs 100 is paid to the government as turnover tax. Once the profit margin of Bevco has been increased from 8% to 25%, the profit of the bar hotels would come down to less than Rs 100, from which they will have to pay the turnover tax of Rs 100, effectively netting a loss.
Government had revised the profit margin of Bevco on the basis of a request from the corporation to improve its financial position. As per the order issued by the taxes department on Wednesday, the profit margin of Bevco in its supplies to Consumerfed has been increased by 20%, while the margin in supplies to bar hotels have been increased by 25%.
There are 639 bar hotels and 300 Bevco and Consumerfed outlets in state. Bevco has roughly estimated revenue loss at Rs 1,800 crore for sales lost when the outlets were shut. The corporation is expecting to make up for this loss through increased profit margin and sales in the coming days. The very first day of sale after 51 days of shutdown had fetched it Rs 51.25 crore, which is the highest single-day sales ever for the corporation.