Additional Liquor Tax Results in Massive Sales Dip in Guwahati

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Additional Liquor Tax Results in Massive Sales Dip in Guwahati

G Plus News | May 23, 2020 15:34 hrs

GUWAHATI: While the Assam government had claimed that it hoped to earn additional revenues to the tune of Rs 1,000 crores generated after increasing the tax on liquor, the city’s liquor shop owners and distributors are of the view that the government may well end up on the losing side. This is because the initial sale trends after the tax increase shows around 50% to 60% dip in sales of liquor all over Assam.

A prominent city-based liquor shop owner talking to G Plus under condition of anonymity said, “It is not a 25% tax increase for all liquor segments; the new prices in the upper segments make them around 50% to 65% costlier.” As an example he said that Red Label whisky used to cost Rs 1,800 per bottle. After adding the 25% tax it should have been Rs 2,300 per bottle. However, the actual price is over Rs 3,000 now. Similarly, many upper segment brands are now priced very high and work out to more than 25% on the previous MRP. 

Assam excise department had imposed 25% tax on the MRP across all segments of IMFL, beer, wine and overseas products recently. The entire tax increment over the original MRP will be added to the state exchequer. 

The government’s decision of increasing the tax on liquor is also alleged to be unplanned and has jeopardised the government’s target of collecting more revenue. 
Another wine shop owner said that 70% of IMFL market depends on the sale of 180 ml size liquor bottles (popularly called the quarter) which comprise the smallest bottles. The 750 ml (popularly the full bottles) bottles are not sold in large quantities. Therefore, the owner said, “The government could have levied more tax on the 180 ml size bottles and kept the 750 ml bottles with minimum tax increase.” But the price was increased segment-wise, the lower segments were increased by 25% on the MRP whereas the upper segment brands were increased with 50% to 65% tax, said the wine shop owners. 

Because of the lockdown people are already facing financial crisis and the added tax increase on liquor has impacted the sales, said another wine shop owner. 

The excise department senior officials have a different calculation. According to them, as soon as the lockdown on liquor shops was withdrawn, people started stocking liquor in huge quantities. Therefore there is a dip seen in the sales currently. It has been just a few days, so the exact scenario cannot be understood and conclusions drawn, said a senior excise department official. Only by next month can it be concluded exactly whether the sales have dipped or not, expressed the official. 
   
There might be a dip in the sales which is affecting the liquor industry but many people are happy that a move like this will help in reduction of alcohol addiction. 
The excise department generates Rs 150 crores as revenue from liquor sale every month in Assam. 

G Plus will report next month what the revenue generation was this month to study how liquor sales have been affected in actuality. 

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