Thiruvanathapuram: Amid a heated political debate over the proposed tax structure for low-alcohol beverages, Chief Minister V. D. Satheeshan told the Kerala assembly on Wednesday that the new budget tax rates would only be implemented after receiving approval from the ruling UDF.
Responding to the Budget discussions, he said that since the Abkari policy is a political decision, it must be made collectively by the UDF leadership. In his Budget, Satheeshan had suggested two tax slabs for a new category called low-alcohol beverages: 120 per cent for drinks with 0.5 to 10 per cent alcohol content, and 175 per cent for drinks with 10 to 20 percent alcohol content.
The chief minister said a draft liquor policy will be formulated, and all UDF constituents will be consulted for their opinions. “A decision will be made only after this process,” he said and added that if the UDF gives the go-ahead for the sale of low-alcohol and includes the proposal in the new liquor policy, then these would be the proposed rates. If the UDF opposes it, these brands will not be sold in the state.
He refuted the charge that the Excise Department was kept in the dark about the new tax proposal. “When a new tax proposal is included in the budget, discussions are usually not held with the departments concerned. This is something all finance ministers are aware of,” he said.
Criticizing the opposition on the issue, Satheesan claimed that low-alcohol drinks were the LDF’s brainchild. Discussions with liquor majors had begun soon after the second Pinarayi Vijayan ministry took office in 2021. Within six months of assuming office, the then excise minister M.V. Govindan issued a note directing officials to submit an urgent report clearly defining the category of low-alcohol beverages, based on applications from Bacardi India and SDF Industries. “Who was talking to Bacardi then?” he asked.
Satheesan added that the previous LDF government had even amended the Foreign Liquor Rules to facilitate the sale of low-alcohol brands like Bacardi Breezer.
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