Liquor outlets in Karnataka cry foul over excise penalty

The KLA now wants the Government to remove the minimum purchase requirement clause from the excise rules.

Written by Harsha Raj Gatty | Published: June 6, 2014 8:56:21 pm

Liquor outlets in Karnataka face slowdown and around 5,000 of them might have to pay fines of up to Rs 30 lakh for falling short of the minimum quantity stipulated by the state excise rules. The Karnataka Liquor Association (KLA) now wants the Government to remove the minimum purchase requirement clause from the excise rules.

KLA sources also indicated that it might move the Karnataka High Court against the Excise Department for the retrospective imposition of penalties. According to Karnataka Excise Rules (Sale of Indian and Foreign Liquor),1968, if the outlets cannot sell the stipulated minimum quantity, they could be fined between Rs 15 lakh and Rs 30 lakh or risk having their licence being revoked by the Excise Department.

“Like other businesses, we should be allowed to operate on demand and supply terms, but here we are forced to purchase a minimum quantity of 52 cases or 468 litres per month from the Karnataka State Beverages Corporation Limited (KSBCL). If we purchase less quantity or stock the excess supply we are penalised Rs 100 per litre,” said Vasan, a member of KLA.

KSBCL should make the process of procuring and distribution of liquor transparent, Vasan added. According to him, even the payment for the procurement of the stocks is through Real Time Gross Settlement (RTGS), and hence old rules must be repealed.
KLA is also blaming the shortfall in consumption on Bangalore city traffic police’s crackdown on drunk driving. It has requested the state government to set a higher Blood Alcohol Content (BAC) for determining if a motorist is under the influence.

“With existing tax and other moral outcries against the the liquor industry, we are barely able to sell 26 cases each month, further imposition of old laws bring down our margins, reducing our ability to offer new variants to customers,” Vasan said, adding that the outlets shell out lakhs to the state government each year for acquiring licences.

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