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Excise policy 2024-25: With eye on cutting losses, Chandigarh mulls lowering VAT, excise duty
This fiscal year, the department finds itself staring at a ₹200-crore plus loss; with just over two months to go in the fiscal year, the revenue earned stands at ₹550 crore against the target of ₹830 crore
With Chandigarh’s excise and taxation policy for 2023-24 failing to yield desired results, the department has prepared and forwarded a draft of the new excise policy for 2024-25 to UT administrator Banwarilal Purohit for approval. The new policy comes into force from April 1.
This fiscal year, the department finds itself staring at a ₹200-crore plus loss. With just over two months to go in the fiscal year, the revenue earned stands at ₹550 crore against the target of ₹830 crore.
This comes in the backdrop of 18 of the total of 95 liquor vends in the city failing to find takers in the 20 e-auctions conducted in 2023.
In the draft policy, the department has proposed lowering VAT and excise duty to bring them on par with Haryana and Punjab. The higher value was one of the major factors in the liquor vends going unsold in the auctions.
The administration aims to set a revenue target of more than ₹900 crore in the new excise policy, with the e-tendering process for the auction of vends set to be initiated after the policy’s issuance in February.
A senior officer of the UT administration official said the draft for excise policy 2024-25 has been prepared keeping in view measures to prevent a significant loss and to ensure auction all liquor vends are auctioned. The administration studied the recommendations of the excise policies in Punjab and Haryana.
After the UT administrator’s approval, the notification for the new policy will likely be issued in February before the usual March announcements, due to the impending implementation of the election code of conduct for Lok Sabha elections. The administration has also invited suggestions from residents and stakeholders for the new policy, which may include changes in the opening and closing times of liquor vends.
Members of liquor contractors’ associations had earlier boycotted a stakeholders’ meeting to discuss suggestions.
Darshan Singh Kler, the president of the Wine Contractors’ Association, expressed the need to reduce the quota and lower VAT and excise duty, cautioning that half the vends will go unsold if the changes don’t materialise.
Punjab imposes a 1% VAT on the ex-distillery price (EDP), while Chandigarh levies a 12.5% VAT.
