The State government on Wednesday requested Governor Arif Muhammad Khan to promulgate an ordinance to amend the Kerala General Sales Tax Act to hike the levy on legal liquor.
The government has proposed a 35% sales tax hike on hard liquor. The increase will apply uniformly to low-priced, mid-priced, and premium brands.
Currently, the government levies a 202% sales tax on liquor that costs the Kerala State Beverages Corporation (Bevco) less than ₹400 per case (12 bottles).
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The sales tax for liquor with a purchase price of over ₹400 per case is 212%. The purchase price also includes the warehouse margin of 20% charged by Bevco.
Officials said the proposed tax regime would bring about an increase in price ranging from ₹70 to ₹130 per bottle, according to an initial estimate.
The government has also increased the sales tax on beer and wine by 10%. It justified the hike by stating that the COVID-19 crisis had caused conventional streams of State revenue to dry up.
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The tax proceeds from the sale of lottery and liquor had dented the GST revenue returns.
The Congress has slammed the hike. Kerala Pradesh Congress Committee (KPCC) president Mullapally Ramachandran said the government was trying to steal from the people instead of putting money in their hands. Congress legislator V.D. Satheeshan said the price hike would not hold in check the demand for alcohol. It would only further hobble the ability of the working class plagued by unemployment to put food on the table. Finally, families of wage earners would suffer, he said.
The government is yet to decide on resuming the sale of legal liquor. It has invited start-up IT companies to put in a bid for enabling an online order-based virtual queue system for retailing alcohol from State-run outlets.
The government is also considering a proposal to amend the liquor law to allow bars and beer and wine parlours to sell liquor as takeaways. An official said the twin proposals would help mitigate tight lines and the long wait to purchase legal alcohol.