Deputy Chief Minister Manish Sisodia on Wednesday said the Delhi government is likely to earn an additional revenue of ₹3,500 crore from the Excise Department during the current financial year as the government has revised the excise policy and plugged leaks in the revenue flow.
Under the new excise policy, which was announced earlier this year, the legal age for liquor consumption was reduced to 21 years from 25. Addressing the media on Wednesday, Mr. Sisodia said the new policy was needed as Delhi had a large number of excise evaders.
“Under the new policy, the biggest change was that the excise duty and VAT, which were usually evaded, were converted into licence fee. Till now the fee was very nominal, like ₹8-₹10 lakh, and then there were 250-300% excise duty and VAT. People had many incentives for evading the excise,” the Minister said.
Under the new policy, the licence fee has now increased to ₹6.5 crore to ₹7 crore per shop. The government increased that also by 10% and then started the bidding process for liquor shops, Mr. Sisodia said.
“We had estimated that we will receive 200% more revenue. Now, the government will receive ₹3,500 crore extra revenue in the next 12 months. This is revolutionary. We did have liquor sales compensating this much revenue, however, tax was being evaded,” he said.
“This will show the benefits of the new excise policy and confirm the government’s claim that liquor mafia was evading taxes on a very big scale,” he added.
32 zones
The Minister said the government has divided Delhi into 32 zones and they have received roughly 250 bids. The government will get a revenue of approximately ₹10,000 crore from these bids. The new shops will open from November 17.
He said it is a “relief” for the government as the revenue from taxes has been falling since the pandemic.
“Overall, our tax collection is low by 23%. In this, the GST collection compared to what it should have been by now is 23% less. VAT collection is 25% less. Excise collection is 30% less, stamp duty collection is 16% less and Motor Vehicle Tax collection is 19% less,” the Minister said.
