Good news for alcohol lovers: Alcohol exemption from tax hike in budget this time!

Source: The New Indian Express

BENGALURU: The state government has come forward to exempt alcohol from new taxes or excise duty in the forthcoming budget.

Chief Minister BS Yeddyurappa has hesitated to impose any additional excise duty (AED) on domestic liqueurs. Sources said that the government would not levy additional taxes because the increase in the price of liqueurs would be a curse to the government and would increase the sale of illicit and non-toxic liqueurs.

Last year the state government increased the excise duty twice. Last year’s budget was announced with a 6 percent increase on domestic liqueurs. Then last May, the state government increased the excise duty again to 11 per cent.

The excise duty was increased after the lockdown was relaxed last year to cover the loss of Rs 2,500 crore caused by the state government’s coffers without liquor sales during last year’s lockdown. Yet revenue is lower compared to 2019-20 due to the increase in excise duty and Corona lockdown.

According to official data released on February 8, the excise collection was Rs 19,300 crore, official sources said. The revenue target is likely to reach Rs 22,700 crore by March 31, 2020-’21, excise department sources said. Between April 2020 and January 2021, excise revenue recorded a gain of 3.38 per cent compared to the corresponding period. The revenue target for the last financial year was Rs 20,950 crore.