Mumbai: Cash strapped Maharashtra State has proposed to increase state excise duty on country liquor and Value Added Tax (VAT) on foreign liquor to get additional revenue worth Rs 18,000 crore to boost the economy. Once, the budget will be approved by both the Houses of the state legislature, the average VAT will be hiked by five per cent and it will raise it from the existing 35 percent to a new height of 40 percent.
However, the hotel and bar owner’s association has opposed the proposed hike in excise and VAT charges to liquor.
State finance minister Ajit Pawar during his budget speech said that it is decided to classify country liquor into two separate categories.
“The category will be branded and non-branded country liquor while increasing state excise duty to 220 percent of manufacturing cost or Rs 187 per proof litre whichever is high on branded country liquor only,” said Pawar.
It will help to get additional revenue of Rs 800 crore, he said.
Pawar also proposed to increase the rate of VAT on the sale of liquor as prescribed in Schedule – B of VAT Act from the existing 60 percent to 65 percent.
The Finance minister also proposed to increase the rate of VAT on the sale of liquor as prescribed in section 41 (5) of VAT from the existing 35 per cent to 45 percent.
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“Due to this, the state is estimated to get additional revenue of Rs 1000 crore,” said Pawar.
Meanwhile, according to Anand Bakale, regional president of the Federation of Hotel Association of India, the rate of branded liquor will be increased from Rs 58 to Rs 72, whereas for non-branded liquor, the liquor lovers will have to pay Rs 52 instead of the existing Rs 38 per litre.
Bakale said that the average cost of liquor will be hiked by Rs 40 to Rs 45. “It seems the Maha Vikas Aghadi government does not want bar owners to do the business. During the lockdown, the restaurant and bar owners have lost their business. Now, we have restrictions on business timing. We are not allowed to serve liquor after 3 pm in rural Maharashtra. And now, the state has proposed to increase excise duty and VAT. How can we survive?” Bakale asks a question?
