Mumbai: Drinking of liquor will turn more expensive in Maharashtra from January 1 as the state government has hiked the excise duty substantially.
According to available information, the hike will be in the range of 4-25 % and is expected to garner the state government additional revenue of Rs 500-crore annually.
With the state’s finances under a severe crunch due to a farm-loan waiver, seventh pay commission and recent removal of surcharge on fuel, the state is hoping that this duty hike can make up for the losses.
The state excise department sources said that the major hike will be for premium and mid-sized Indian Made Foreign Liquor (IMFL) in the range of 20-25 % while small brands will face a hike of just 5 %. Foreign liquor brands will face a duty of around 4% now.
A notification has been issued to amend the Maharashtra Potable Liquor Rules, 1996 to make way for this hike. Justifying the hike, an excise department sources said that the duty has been raised after five years and nine months.
The sources claimed that they have hiked the duty after a detailed study. This should not add too much of a burden and things will stabilise in the coming months. Sources explained that some brands such as Antiquity, Royal Stag, Teachers and VAT 69, going by their current manufacturing costs, were likely to see a bigger hike. Some of the smaller brands like Haywards and Bagpiper, however, would not see much of a price hike. “We have deliberately kept the low segment IMFL and foreign liquor taxes low as this would have encouraged more smuggling from neighbouring states like Goa and Daman,” sources said and pointed out that the reason was that the price difference between the states is very high and this encourages many to smuggle from other states.