BENGALURU: The Resource Mobilisation Committee constituted by the State Government to examine the State’s alcohol excise taxation structure submitted its report a couple of days in which the Committee recommended a shift toward a public health-oriented, alcohol-content-based taxation system. Earlier, the State Government proposed a major haul of its excise tax structure and issued a draft notification of its proposed alcohol-content-based taxation system.
The proposed alcohol-content-based taxation, excise duty will be calculated on the actual alcohol content in each bottle. Higher the alcohol content in beverages, higher the tax attraction, as the draft proposed. The higher alcohol content would push Indian made liquor such as whiskey, rum, brandy and gin to go up by about 20 percent.
At the moment, the Report of the Resource Mobilisation Committee is available in public domain on the official website of the Finance department, Government of Karnataka for wider consultation. Stakeholders including industry participants, public health experts, academic institutions, civil society organisations and citizens to review the Report and submit their comments. Stakeholders are asked to share their views on or before May 22.
A Wine merchant told Deccan Chronicle such a system is in Britain, Scotland among others countries where rates are fixed over their alcohol content, now that Karnataka is moving to introduce alcohol-content-based taxation would bring down the price of beer by about Rs 10 from its existing price of Rs 180-Rs 200 per bottle.
Alcohol content in beer bottles ranges from 12 percent-5 percent and under the alcohol-content-based taxation, the prices could drop in coming days, the trader said and stated the prices of lower segment whiskey could surge by about Rs 15 in the market.
In that case, he said, whiskey rates go up then the sales will drop significantly in border areas of the State. If whiskey goes up from Rs 95 to Rs 110 after alcohol-content-based taxation, customers in border areas will buy in neighbouring Andhra Pradesh or Tamil Nadu where the prices are less by Rs 10 than in Karnataka.
He said the State Government could reach its expected revenue target of about 5,000 crore under the alcohol-content-based taxation system but “the move could also backfire.”
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