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18 liquor vends still unsold, Chandigarh puts auctions on hold
The unsold liquor vends are set to cause the Chandigarh excise and taxation department a loss of nearly ₹100 crore in financial year 2023-24
After failing to sell 18 of the 95 liquor vends in the city despite 18 rounds of auctions since March, the UT excise and taxation department has put further auctions on hold.
The unsold liquor vends are set to cause the department a loss of nearly ₹100 crore in financial year 2023-24.
On July 18, the department had conducted the 18th round of auction, where, for the fifth consecutive time, it failed to attract any bidders. No bidders had come forward even during the 5th, 8th, 9th and 12th rounds.
The first auction was held on March 15 and the department has been slashing the reserve price by around 5% since round 3, going up to 50% by round 18.
A senior officer of the UT excise and taxation department said, “We have put the auctions on hold for now and will take up the matter with the higher authorities. We will also slash the quota as four months of the financial year are already over.”
For the current financial year, the department had set a revenue target of ₹830 crore from liquor vends’ licence fees, but has so far collected only around ₹500 crore.
In 2022-23, the department was able to sell 93 out of the total 96 liquor vends after conducting seven auctions.
Liquor contractors have maintained that the poor response to the auctions is due to the Punjab excise policy offering more perks than that rolled out by Chandigarh.
They say VAT in Punjab is 1% of the ex-distillery price (EDP), compared to a much steeper 12.5% VAT in Chandigarh. Another reason for contractors’ exodus from Chandigarh is the excise fee, which is 1% in Punjab, but ranges between ₹445 and ₹3,500 per case in the UT.
Contractors have also blamed UT for fixing quota at 18 lakh liquor boxes a year, which means unlifted liquor cases will lead to a penalty. The penalty is ₹900 per case for Indian made foreign liquor and ₹3,500 per case for foreign liquor. In contrast, Punjab has an open quota with no compulsion.
They have also cited the higher licence fee in Chandigarh for the poor response, which is ₹6 crore on an average compared to ₹1.5 crore to ₹2 crore in Punjab.
