Having taken a beating in revenue collections during April and May when the lockdown was in place, the excise revenue is yet to catch up with last year’s figures despite a steep hike in excise duty. The collection is down by 4.25% or ₹612 crore, compared to the corresponding period of last year, which wine merchants have attributed to high price in times of pandemic.
In the first eight months of this fiscal, excise revenues were at ₹13,778 crore as against ₹14,390 crore collected for the corresponding period last fiscal. While the collections are coming close to that of last year, the current collection is far behind the target set for this fiscal.
In 2019-2020, the total collection of 68.69% by the end of November was against a set annual target of ₹20,950 crore. The target for excise collection for this fiscal is ₹22,700 crore, and the current collection of 60.7% is way behind.
In a bid to increase revenue, the cash strapped Government- affected by the pandemic- increased the excise duty on Indian Made Liqour (IML) from 17 % to 25 % in various slabs, which also included 6 % excise duty hike announced earlier in the budget. The additional hike that came to effect in May was expected to mop up an additional revenue of Rs. 2,350 crore against an estimated loss of about Rs. 2,500 crore due to shutdown. In April this year, just about Rs 1.06 crore had been collected when compared to Rs. 1,302 crore last year.
In terms of sales, while a total of 400.86 lakh carton boxes (CMs) of IML had been sold last year, it has declined by 11.19 % to 356 lakh (CBs)this year. Beer sales has declined quite a bit with decline in sales to be about 33.58 %. While 192.67 lakh CBs were sold last year, it has been down to 127.97 lakh CBs, which is attributed to lockdown during summer months when the demand for beer is high.
Meanwhile, the Federation of Wine Merchants Association, Karnataka has said that the decline in revenue and sales was due to steep hike effected in May. "Bars have not shown improvement in sales, and foot falls have not increased. In times of pandemic, a steep hike does not augur well. Despite repeated requests to Government to reduce excise duty, Government is in no mood to bring down the duty," Federation's General Secretary Govindraj Hegde said.
