Business

‘Alcohol cess hurting States’

Weak spirits: States’ excise data show a decline in sales volumes in May-June from a year earlier. S.S. Kumar

Weak spirits: States’ excise data show a decline in sales volumes in May-June from a year earlier. S.S. Kumar  

The ‘unscientific’ introduction of the COVID-19 cess on wine, beer and spirits had impacted all stakeholders, including the State governments, liquor companies and the consuming public, said industry officials.

An exceptionally high special tax imposed by several States to offset shortfalls in revenue amid the pandemic had seen increases of as much as 60-70% on the maximum retail price including a steep rise in the consumer price of beer, according to Carlsberg India and AB InBev.

To stay within budget, consumers were shifting to low-priced, low-quality products, and even moonshine, all of which have huge health and socio-economic ramifications, they asserted. The pandemic cess had adversely impacted the coffers of many States too as the cess had hit sales volumes.

‘Illicit liquor’

Consumers were opting for “lesser priced, harder forms of alcohol and in some cases, to low-quality products as well as illicit liquor, merely on the affordability factor,” said Rishi Chawla, Vice-President, Corporate Affairs at Carlsberg India. “These can have negative consequences on public health,” he added.

States’ excise data show a decline in sales volumes in May-June from 2019. Karnataka reported a 33% contraction in the two-month period. Rajasthan’s excise revenue shrank to ₹697 crore in May, from ₹857 crore a year earlier. Meanwhile, Delhi had recently rolled back the 70% COVID cess, while Odisha too had cut it to 15% from 50%.

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Printable version | Sep 27, 2020 4:17:51 AM | https://www.thehindu.com/business/alcohol-cess-hurting-states/article32271375.ece

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