The UT excise and taxation department is staring at a ₹150 crore loss this financial year with 18 of its liquor vends after finding no takers after the last e-auction held on Tuesday.
The auction was held after slashing the reserve price by nearly 60 %.
Out of a total of 95 liquor vends, 18 will go unsold for the year 2023-24.
For the financial year 2023-24, the department had established a revenue target of ₹830 crore from liquor vend licence fees. However, only ₹500 crore has been collected so far.
The revenue was to come in the form of licence fees for these vends. The fee ranges from ₹3 crore to ₹15 crore depending upon the location of the vend.
The department has now proposed to increase the liquor quota of the existing liquor vends, which will each range from 3,000 cases to 5,000 cases extra. At present, the quota of each vend is 18 lakh cases per year. The move has however not gone down well with the liquor contractors in the city. This is because, as per the existing policy, the UT penalises contractors for un-lifted liquor boxes. If the liquor remains unsold, there is a penalty of ₹900 per case on Indian Made Foreign Liquor while on foreign liquor, the penalty is ₹3,500 per case.
Darshan Singh Kler, president of the wine contractor association, who bought six liquor vends for this year in the auction held on March 15, said that due to their own faulty excise policy, they are burdening the existing liquor vend owners by increasing the quota. He said that increasing their quota would be detrimental to them as they are already facing losses due to the policies of Punjab.
{{/usCountry}}Darshan Singh Kler, president of the wine contractor association, who bought six liquor vends for this year in the auction held on March 15, said that due to their own faulty excise policy, they are burdening the existing liquor vend owners by increasing the quota. He said that increasing their quota would be detrimental to them as they are already facing losses due to the policies of Punjab.
{{/usCountry}}When contacted, a senior excise department official said, we will not be holding any auction now as we have already held 20 auctions but failed to get bidders. Now, we will propose to increase the quota of the existing liquor vends, he said.
Notably, UT consistently underperforms each year. Liquor contractors attribute this to an imbalanced tax structure in comparison to neighbouring cities in Punjab. While officials acknowledge this discrepancy, the department has failed to address the issue. Last year, three out of the 96 vends on offer remained unsold. During the 2022-23 period, the UT excise and taxation department managed to sell 93 out of a total of 96 liquor vends across seven auctions.