Chandigarh administration proposes to adopt lottery system for allotting vends

The UT proposes to abolish the quota system and introduce shop licence fee by which they aim to earn Rs 127 crore per annum.

Written by Hina Rohtaki | Chandigarh | Published:March 18, 2017 11:57 am
A liquor vend on Madhya Marg in Chandigarh. (Source: Express Photo by Kamleshwar Singh)

IN THE new excise policy for 2017-18, the UT Administration has proposed to adopt lottery system for allocating vends in the city instead of the usual auction method. Seeking to abolish the quota system and move to a minimum guarantee model for the sale of cases, the UT also proposes to effect a hike of 10-15 per cent in the minimum sale price and excise duty across all the slabs. As per the proposed excise policy, the administration would charge Rs 75,000 per application by way of lottery method. By this, officials aim to earn a revenue of Rs 75 crore as 100 applications per vend are expected. There are a total of 100 vends operating in the city. Officials found that the liquor trade through auction money had been operating at thin margins and sales were going below the minimum sale price at times.

It is proposed that the minimum sale price would be increased by Rs 100 per bottle for Scotch category and Rs 50 per bottle for other categories and Rs 10 for beer. “This would add Rs 60 crore to the existing kitty of Rs 230 crore for the trade’s profitability. The change would enable Chandigarh to remain competitive with neighbouring states,” the proposed policy states. The vends would be divided into three categories based on location, brand segmentation and previous bid price.

The UT proposes to abolish the quota system and introduce shop licence fee by which they aim to earn Rs 127 crore per annum. “Licence fee for each category be introduced which is to be paid in 10 equal monthly instalments beginning from April to January of shop licence fee. Minimum guarantee and shop licence fee for category A would be 8,000 cases per annum, that is Rs 1.50 crore as the licence fee here. Under category B, it would be 6,000 cases per annum, which is Rs 1 crore as the licence fee, and for category C, the fee would be Rs 75 lakh with 4,000 cases per annum,” states the policy. This would be the minimum guarantee that would be essential for the vends.

The category A would be for those vends where bid price was more than Rs 2.5 crore, category B would be from Rs 1.75 crore to Rs 2.5 crore, and category C would be for the bid price less than Rs 1.75 crore. “No quota of country liquor is to be allocated this time as Chandigarh is an urban centre and can do away with the country liquor adding volumes to IMFL to boost revenue,” the policy notes. Of the revenue of Rs 238 crore in 2016-17, the potential profit pool from the IMFL was Rs 225.4 crore.

“Increasing duty level across slabs by 10 per proof litre (PL) on Indian made foreign liquor (IMFL) and 5 per bulk litre on the beer,” the policy states. The excise duty on beer alone will earn Rs 2.50 crore. A senior official of the UT Administration said that the policy would soon be notified. Liquor vend owners allege bias Liquor vend owners who will have to shut down their vends on the Madhya Marg and National Highway 21 have alleged bias saying that the hotels and restaurants on this stretch should also be banned from selling liquor.

Vineet, a liquor vend contractor whose two vends in Sector 8 on Madhya Marg and Sector 35 on Himalaya Marg would face closure, said, “This is unfair. The basic aim of the apex court’s judgment is that liquor may not be sold on the highway. Then why are these hotels and restaurants located on this stretch allowed to sell it? The bars should also be shut down.” Vineet has been running the liquor vend in Sector 8 for the last 11 years. “Just recently, I had carried out renovation of my vend which cost Rs 25 lakh. All the money will go down the drain now,” he said.

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