Ban on sale of liquor along highways in Maharashtra has little effect after first quarter
In the first financial quarter since the ban came into effect on April 1, the overall sale of spirits and beer in Maharashtra fell by just around 19 per cent.mumbai Updated: Jul 31, 2017 10:00 IST
The Supreme Court’s ban on sale of alcohol within 500 metres of state and national highways that triggered the closure of over 60 per cent liquor outlets across the state has ceased to have any substantial effect on the volume of alcohol consumption.
In the first financial quarter (April-June) since the ban came into effect on April 1, the overall sale of spirits and beer fell by just around 19 per cent, which is far below the 35-40 per cent fall the Excise department was expecting as a fall out of the ban.
A highly placed source in the state excise department revealed that baring beer, the sale of Indian made foreign liquor (IMFL) and country liquor witnessed a marginal dip, thanks to the record consumption of draught beer last year.
According to sources, sale of beer fell to 8.29 crore bulk litres in the first three months following the ban from 10.47 crore bulk litres sold in the corresponding period last year. That is a 21 per cent drop.
Similarly, sale of spirits (IMFL) fell to 3.88 crore bulk litres from 4.62 crore bulk litres (16% less), while sale of IMFL fell from 8.21 crore bulk litres to 7.36 crore bulk litres (10.3% drop) in the first financial quarter following implementation of the court order.
15,033 out of the total 25,513 retail outlets selling liquor and beer across the state were closed down on April 1. Those included wine shops (selling all spirits), bars and hotels selling alcoholic beverages. The state government stopped renewing licenses of those establishments while they were given option to relocate their shops beyond the designated 500 metres limits. As on July 21, only 2 per cent (around 460) of those establishments have been relocated.
Sources said that though the consumption figures showed little dip, the ban has little impact on the overall revenue (tax collection). This is because in December last year, the excise duty on country liquor was increased by 8 percent. The hike was reflected in the steep rise in the revenue collection in the first quarter (ending in March) before the ban came into effect. Similarly, revenue collection from sale of spirits had gone up following the imposition of 30-35 per cent sales tax in October last year. “The comparison of revenue figures for April-June 2016 and for the same period in 2017 will not give a correct picture as the real increase was noticed only after October 2016,” said a senior officer from the state excise department.
Though the short term effect of the ban has not dented the state’s earnings from tax on sale of spirits, officials fear that a different picture will emerge by the end of the financial year.
Following the increase of excise and sales tax on spirits, the department was looking forward to cross the average annual growth rate of 4- 8 per cent in terms of revenue collection. “Had it not been for the ban, we were expecting over 10 per cent growth in revenue collection by the end of this year. However, if situation continues like this, we may end up having no or negative growth in revenues by the end of this year,” the official added.