Liquor prices are set to increase marginally in Kerala. The government’s decision to waive the 5% turnover tax imposed on distilleries in the State has precipitated the latest change in the liquor tax structure.
Distilleries in Kerala had flagged an increase in the price of raw materials, chiefly molasses. They had requested the government to increase the cost of their products procured via the Kerala State Beverages Corporation (Bevco). They had argued that distilleries exporting liquor to Kerala from other regions did not face a turnover tax and demanded a level-playing field.
The government refused to increase the procurement price of liquor. But it agreed to renounce the 5% turnover tax on liquor produced in Kerala.
On Wednesday, the Cabinet hiked liquor sales tax by 4% and Bevco’s warehouse margin by 1% to offset the loss caused by the rollback of the turnover tax on liquor produced in the State.
The Kerala government charges a prohibitive 247% sales tax on liquor. From now on, it will increase to 251% for liquor costing more than ₹400 (750 ml) and 241% for liquor costing less than ₹400 (750 ml). An Excise official said the hike would entail a ₹10 to ₹20 increase in the price of liquor retailed through State-run outlets.
