Karnataka Budget: No cheer for the liquor sector

February 17, 2018 01:21 am | Updated 01:21 am IST -

Liquor is set to cost more as additional excise duty (AED) rates on Indian-Made Liquor (IML) have been hiked by around 8% across 17 slabs, barring the first slab (IML costing up to ₹449 a carton box). Last year’s budget had effected an increase in AED between 6% and 16%.

Chief Minister Siddaramaiah cited the Supreme Court’s order last year on closure of liquor shops abutting highways as having had a considerable impact on the State’s excise revenue. He said the revenue target for 2017-18 was ₹18,050 crore, but only ₹14,572 crore was collected. The State is looking to mobilise ₹17,600 crore revenue for the current financial year.

Pubs and restaurants are likely to pass on the additional cost to customers. People in the industry such as Ashish Kothare said many restaurants and pubs had not passed on the additional cost last year to customers fearing a dip in footfall. “But this time it will definitely be passed on,” he said, adding that the new hike would primarily affect their customer base, as the cheapest liquor has been spared from the hike.

G. Honnagiri Gowda, president of Karnataka Wine Merchants’ Association, added that the decision would impact the trade as a whole as last year’s hike had already impacted business. “After last year’s hike, the cost increase per bottle was between ₹20 and ₹300. Yet another hike will affect us and duplicates will increase,” he said.

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