The state government in its annual budget hiked the minimum rate of excise duty of IFML to Rs300 per proof litre from Rs240, which means a 180-ml bottle of Imperial Blue whisky will now cost Rs140, from the present Rs125. In the case of strong beer, the tax hike has been Rs60 per bulk litre from the Rs42, which will result in Kingfisher Strong beer costing Rs115, from Rs100.
The hike is, however, unlikely to affect premium brands since under the current taxation structure they are already paying more than the minimum rate of excise duty applicable on alcohol.
Both liquor shops and restaurant owners have condemned the hike as a regressive step which will hurt the industry. “The state is losing revenue as people prefer to buy liquor smuggled from neighbouring states, which costs less than half the price here,” said Shashidhar Shetty, chairman of the Association of Hotel and Restaurants (excise committee).
According to Avinash Shetty, who owns the Bombay Wine Merchants shop at Lalbaug, it is the consumer who will suffer. “Consumers tend to move to inferior brands which are not good for their health,” said Shetty. “The state should rationalise the tax since it is very difficult to do business in such an environment,” he added. The state has also hiked tax of country liquor by 12 % and as a result the rate would be hiked to Rs35 from Rs33 per bottle.
However, finance minister Ajit Pawar defended the move saying that the state took steps so that essential commodities are not taxed. “Drinking liquor is not good for health and hence we taxed it more,” said Pawar.