Punjab factor: Chandigarh slashes reserve price at auction of 97 liquor vends begins on March 13

Chandigarh has been suffering losses for the last two years due to Punjab’s excise policy. In Punjab, excise duty and VAT are just 1%. In contrast, Chandigarh imposes an excise duty ranging from ₹66 to ₹377 per proof litre, with VAT at 12.5%. This allows liquor vendors in Punjab enjoy higher profit margins compared to those in Chandigarh. Liquor rates in Punjab are also slightly higher than in Chandigarh.

Seeing loses for the last two years, the UT excise department has slashed the reserve prices for most of its liquor vends for the upcoming financial year (2025-26), the e-auction process for which will start from March 13.

Three years ago, liquor vends on the Chandigarh-Punjab border were auctioned for up to ₹13 crore, but now they are selling for only ₹8-9 crore. (HT File)

A total of 97 liquor vends are on offer in the city. The financial bids will be opened on March 21.

The UT has been suffering losses for the last two years due to Punjab’s excise policy. In Punjab, excise duty and VAT are just 1%. In contrast, Chandigarh imposes an excise duty ranging from ₹66 to ₹377 per proof litre, with VAT at 12.5%. This allows liquor vendors in Punjab enjoy higher profit margins compared to those in Chandigarh. Liquor rates in Punjab are also slightly higher than in Chandigarh.

Over the last three years, instead of increasing the reserve price of liquor vends, the department has consistently reduced it. Three years ago, liquor vends on the Chandigarh-Punjab border were auctioned for up to ₹13 crore, but now they are selling for only ₹8-9 crore.

This year, the department has also lowered the revenue target for 2025-26 to ₹800 crore, down from ₹1,000 crore set for 2024-25. In 2023-24, the department had set a revenue target of ₹830 crore but managed to collect only ₹600 crore.

A senior officer of the excise department said, “We are hopeful of getting a good response as we have not even increased the fee for participating in the auction and it is ₹2 lakh only. Also, the liquor rates have not been increased, he said.

For several years, the Dhanas liquor vend was the most expensive. In 2021-22, it was auctioned for ₹11.55 crore, and in 2022-23, it fetched the highest bid of ₹12.78 crore, despite having a reserve price of ₹10.39 crore. In 2023-24, the reserve price for the Dhanas vend was set at ₹11.53 crore, but no bids were placed, leading to its closure for the entire year. In 2024-25, it was sold for ₹9.17 crore, while the reserve price for 2025-26 has been set at just ₹8.71 crore.

Wine contractors’ association president Darshan Singh Kler said, “Despite the growing number of unsold liquor vends in Chandigarh, officials refuse to acknowledge the reality. Liquor vendors are struggling with multiple challenges. We provided several suggestions to the department to revive the liquor business in Chandigarh, but they were not implemented. Meanwhile, Punjab revised its policy and increased its revenue from ₹6,500 crore to ₹10,500 crore, whereas Chandigarh’s revenue continues to decline.”

As a result, many liquor contractors have shifted their businesses from Chandigarh to Punjab, he added.

This year, the Chandigarh excise department has also lowered the revenue target for 2025-26 to ₹800 crore, down from ₹1,000 crore set for 2024-25. (HT Photo)