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Gujarat becomes drier as govt raises liquor prices, tightens permits issuance

To increase revenue, the Gujarat government has hiked excise duty on spirit and wine by three fold and increased special fees on premium Indian Made Foreign Liquor and imported brands.

india Updated: Aug 04, 2018 17:57 IST
Hiral Dave
Hiral Dave
Hindustan Times, Ahmedabad
Gujarat,liquor price,Excise duty
The hospitality industry and liquor shop owners in Gujarat say their business is down by almost by 40% in the first four months of this financial year as compared to the same period last fiscal.(HT File Photo)

It’s double whammy for tipplers in Gujarat with the state government tripling excise duty on alcohol and slashing the number of health conditions under which a person can apply for a permit to buy liquor in the dry state .

With Gujarat getting drier, the hospitality industry and liquor shop owners say their business is down by almost by 40% in the first four months of this financial year as compared to the same period last fiscal.

The government wants to boost revenue but insists that the decisions were taken to ensure that the tourism industry is not affected.

“Changes in the prohibition rules and regulations are aimed at further reining in irregularities while ensuring that the tourism industry is not affected,” explained minister of state for home Pradeepsinh Jadeja.

The first step Gujarat government took was a three-fold hike in the excise duty on spirit and wine and a special fees, ranging from Rs 1,500 to 6,000 per bottle on premium Indian Made Foreign Liquor and imported brands in the budget. “We aim to increase the revenue to Rs 106 crore (from Rs 86 crore) by hiking the excise duty and other charges,” said Gujarat finance minister Nitin Patel.

So, a can of beer in Gujarat now costs Rs 240 as compared to Rs 80 to Rs 150 elsewhere, said a leading hotelier in Ahmedabad, who was not willing to be quoted for fear that his comments could be constructed as criticism of the government’s policy. A bottle of premium whisky that earlier used to cost up to Rs 6,000 per bottle is now selling at Rs 14,000, he said.

“Our sales are down by about 40% from on an average Rs 90 lakh to 1 crore per month,” said a liquor distribution license holder in the state capital.

The second reason for fall in sales is the health department not renewing liquor permits to residents of Gujarat because the government wants to exclude common ailments like anxiety, body ache, insomnia or migraine from conditions to get the permit. Those above 40 years are entitled to get the permit.

Health department officials say the move will reduce the permits from about 42,291 which increased after 2011 when tourism was being promoted to less than 20,000 per year. The government suspended renewal of permits in March this year and about 8,000 applications for renewal of the permit are awaiting government nod, officials said.

What prompted the government to go on the overdrive was an anti-liquor campaign launched by young leaders Alpesh Thakor of Congress, independent MLA Jignesh Mevani and Patidar leader Hardik Patel.

The three raided several places where liquor was being sold. Last month, they were booked for trespassing when then forcibly entered an alleged bootlegger’s home and claimed to have recovered liquor. Thakor is not convinced about the government’s seriousness in enforcing prohibition.

“The new rules and regulations will remain on paper…the government officials and police are working in tandem with bootleggers, which has affected the effective implementation of prohibition laws,” said Thakor, who had been running a de-addiction drive in his base in north Gujarat region for years.

Last month, N K Singh, chairman of the 15th Finance Commission said in Ahmedabad that the the Gujarat government has sought Rs 9,000 crore compensation from the Central government for the revenue loss due to prohibition.

First Published: Aug 04, 2018 17:06 IST