Goa liquor traders see red as government raises taxes
Liquor traders in Goa fear that the new prices will drive down alcohol sales in the state which now boats of relatively low prices.Updated: Feb 12, 2020, 19:44 IST
The Goa government’s decision to raise duties on alcohol across the board will be counterproductive and will drive the final nail into Goa’s tourism and liquor industries, stakeholder bodies said Wednesday.
Industry bodies including the International Spirits and Wines Association of India and the Goa Liquor Traders Association fear that the increased prices will lead to a decrease in sales which, rather than helping the government augment revenues will fall way short of the Rs 100 crore additional revenue that the state hopes to earn from the proposed increase.
In his maiden budget speech earlier this month, Goa Chief Minister Pramod Sawant announced a hike in excise duties and fees on the sale of liquor in a state that is known for its cheap alcohol with the hikes ranging from 20%-50% across the board for all categories of spirits.
The move, he said, was aimed at augmenting state revenues which have taken a hit following the implementation of the Goods and Services Tax. The State earns around Rs 400 crore from excise revenue and hopes to earn an additional Rs 100 crore in the new fiscal with the increased taxes.
“We are disappointed with the price hikes and even more so because we could have worked with the state government to achieve its revenue targets without increasing the excise duties,” Amrit Kiran Singh is the Executive Chairman of the International Spirits & Wines Association of India told HT.
“Through encouraging ‘premiumisation’ as well as expansion of the excise duty slabs we can ensure that consumers “drink less, but drink better” we can ensure that revenue targets are met, the state’s image as a destination is protected and we promote responsible drinking,” Singh said adding that he was eager to work with the state government to modify the hikes.
The Goa Liquor Traders’ Association too said the new rates will kill the industry.
“Hikes like these will totally kill the liquor industry, which is one of the few industries in the state that is controlled by locals. 75% of the liquor bought in Goa is not for consumption, but to carry it back of which two bottles per passenger is allowed,” Dattaprasad Naik, president of the Goa Liquor Traders Association said.
“This Rs 100 crore revenue they are hoping to get is subject to sales. It is only if sales continue at current levels will they get such revenue, which is not going to happen. Tourists will start bringing their liquor from their own states to drink in Goa. Alcohol will be cheaper here than only what it is in Maharashtra and some other states.”
He said that if the proposed hikes are operationalized the price of foreign liquor in Goa will be higher than much of North India and higher than the price in 71% of the country.
“With these hikes the liquor industry will be killed overnight,” he said.
Singh said that it was more a case of having to protect Goa’s image as a party destination. “Goa will need to compete not with other states of India, but with the likes of Sri Lanka as a destination, which can take a beating with such decisions,” he said.
The proposed hikes are scheduled to come into effect from April 1.