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Tuesday, March 02, 2021

Excise Policy 2021-22: Liquor prices in Punjab unchanged, sale quota increased

Punjab is looking at revenue collection of Rs 7,002 crore in the next fiscal against an expected collection of Rs 5,794 crore in the current fiscal. This is Rs 300 crore more than the estimates in the budget 2020-21 at Rs 5,578 crore.

Written by Kanchan Vasdev | Chandigarh |
February 2, 2021 12:13:59 am
Finance Minister Manpreet Badal told the media that as per the realised collections of excise duty, the state had earned a revenue of Rs 5,027 crore in the last fiscal and this year the state had witnessed an increase of 15 per cent.

Liquor prices in Punjab will remain unchanged in the next fiscal year even as the state has increased its quota for sale of liquor to enhance its revenue from excise. Punjab Cabinet on Monday gave its nod to the Excise Policy 2021-22.

The state is looking at revenue collection of Rs 7,002 crore in the next fiscal against an expected collection of Rs 5,794 crore in the current fiscal. This is Rs 300 crore more than the estimates in the budget 2020-21 at Rs 5,578 crore.

Finance Minister Manpreet Badal told the media that as per the realised collections of excise duty, the state had earned a revenue of Rs 5,027 crore in the last fiscal and this year the state had witnessed an increase of 15 per cent.

The state government was on the defensive in the current fiscal for hooch tragedy claiming over 100 lives. The government had then launched an Operation Red Rose to nail the illegal sale of liquor.

“It is under this operation only that we have to increase the quota to be sold by the legal vends. We will not allow the sale of illegal liquor. Those buying from bootleggers will turn to the vends. That is why we will allow the vends to sell more, with no change in prices of liquor so that the people do not have to shell out more,” A Venu Prasad, Additional Chief Secretary-cum-Financial Commissioner, Taxation, Punjab told The Indian Express.

He added that the quota of country made liquor (PML) is proposed to be raised by 12 per cent, that of Indian Made Foreign Liquor (IMFL) by 6 per cent and that of Beer by 4 per cent.

“This will not only help us check on bootleggers but also enhance our revenue collections by about 20 per cent,” added Prasad.

The government was also under attack this fiscal for not recording a rise in the excise collections. Former Chief Secretary Karan Avtar Singh had come under attack from the ruling party leaders as well as the opposition for the curve of revenue from excise not registering growth.

RELIEF FOR MARRIAGE PALACES, HOTELS AND RESTAURANTS

The annual fixed licence fee for bars in hotels and restaurants has been slashed by around 30 per cent, for marriage palaces by around 20 per cent and the fee on consumption of liquor (assessed fee) has also been reduced. Manpreet Badal said the Cabinet allowed the slashing considering that Covid pandemic had hit the hospitality industry hard and the relief would help it recover. The slashing was a demand of the hospitality industry.

The wholesale trade of liquor will be monitored online by the government replacing the present L-13 wholesale licensees.

A government statement after the Cabinet said that the state government is banking on the performance of the excise department during the year 2020-21 despite Covid-19 disruptions, which is now slated to garner around Rs 300 crores over and above the budgeted target of Rs 5,578 crores. If successful, the government would be able to jump from Rs 5,073 crores in 2019-20 to Rs 7,000 crores in 2021-22, an increase of whopping 40 per cent in two years. The department proposes to collect the additional revenue by increasing the quota. In a first, the department has proposed to impose a quota for foreign liquor in Municipal Corporation areas and ‘A’ Class municipalities.

The excise policy has been formulated specially to give relief to those sections of the society which were affected negatively due to Covid-19.

The policy allows renewal of existing vends subject to lifting of additional liquor by the licensees. It is likely to bring stability in the liquor trade and will also generate additional revenue for the state exchequer.

MORATORIUM ON NEW DISTILLERIES

The state government has also decided to place a moratorium on setting up of new distilleries, breweries or bottling plants. It has also decided no new Letter of Intent (LoIs) will be issued for establishing manufacturing units in the current year. The government has also made it mandatory for the LoIs issued for setting up of a Bottling Plant to complete their project by March 31, 2023.

In order to maximise the revenue, a minimum guaranteed quota for imported foreign liquor has been introduced in Municipal Corporations, A-Class Municipal Committees etc. The L-1 (Import)/L-1BB licensees will have to procure IFL from the custom bonded warehouses situated in Punjab only.

To encourage ethanol manufacturers and proper utilisation of agriculture produce, a new licence (E-2) has been introduced for setting up an ethanol based distillation plant with a nominal fee.

The border areas of the state of Punjab have been given relief by converting 25 per cent of the Fixed License Fee (FLF) to Additional Fixed License Fee (AFLF).

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