The delay in formulating new excise policy for the year 2014-15, despite permission from the Election Commission of India, has cost the Chandigarh administration dear as it has incurred a loss of around Rs. 5 crore after 26 liquor vendors refused to extend their contracts.
The existing policy was to expire on April 30 and all licencees — for wholesale and retail sale — were asked to submit their consent for one-month extension. The Chandigarh administration had extended the existing policy till May 31.
The excise and taxation department received only 76 applications from Indian-made foreign liquor (IMFL) vendors out of total 93, while in the case of country-made liquor, only 23 vendors out of 28 opted for extension.
According to sources, the losses include around Rs. 2 crore of license fee for one month and around Rs. 3 crore of liquor quota, which will not be lifted.
Blaming the administration for its lax approach, president of the Chandigarh Wine Merchant Association Satyapal said the authorities failed to formulate new policy despite getting a nod from the Election Commission of India (ECI) to announce new policy during the model code of conduct.
"The association had warned the excise department of the consequences of delay, but they failed to act," rued Satyapal.
UT assistant excise and taxation commissioner RC Bhalla said the process of framing new policy had been initiated and it would be announced shortly.
The new excise policy of Punjab government came into force on April 1, in which the state government reduced the rates of liquor.
Last year, the administration had increased the excise duty from 20% to 300%, and assessment fee by 33%, thus pushing the liquor rates higher.
The administration suffered a loss of around Rs. 60 crore due to 90 vends remaining unsold, despite repeated attempts. For attracting bidders, the department had even reduced the reserve price of vends by 30%.
The administration also faced a loss of around Rs. 50 crore due to the closure of liquor vends operating from pre-fabricated structures.
After the 2013-14 excise policy came into force, the administration was forced to remove the pre-fabricated structures on the directions of the Punjab and Haryana high court issued in 2012.
There were a total of 28 pre-fabricated structures in the city, which were used as liquor vends on roadsides.