Two months after Punjab hiked export fee on IMFL and beer, few manufacturers are resenting the government move, even as the state defends its decision by saying the levy, despite the hike, was “too little” compared to other states.
The government had, in July, revised the export fee from Rs 0.40 to Rs 0.80 per proof litre for IMFL, Rs 0.50 per BL on beer from previous Rs 0.10 per BL. The export fee on Extra Neutral Alcohol (ENA) was raised from from Rs 0.5 BL to Rs 0.20 BL.
The government’s move will help the funds crunched state earn Rs 40-50 crore by hiking the export fee.
Opposing the move, a distiller said: “The imposition of duty of Rs 44 on ENA used for making liquor for export to other states is a big dent on manufacturers’ pocket. If they impose this duty as export pass fee, then only manufacturers can bill it to the customers and get this amount back otherwise it will hit them hard.” Punjab has 60 distilleries and out of these 15 major units are exporting liquor to other states.
While a few distillers are upset at the hike, government has defended it move stating it needed money amid Covid and the hike was not much compared to neighbouring states.
“The distilleries are water guzzlers. They are using our precious resource and while all other neighbouring states have imposed this levy, we have hiked it only this year. Haryana’s export fee is 3 times higher than Punjab,” said A Venu Prasad, Financial Commissioner (Taxation), Punjab.
He added that they had yet not brought the fee at par with Haryana considering that the distillers on Punjab had to pay more on transportation than Haryana.
“If they want to export liquor to Delhi or UP, then Haryana gets the locational advantage. We have to keep in mind the competition also.”
Eyebrows are often raised on low excise collections in the state having liquor consumption more than many others. The government move of keeping the export fee lesser than neighbouring states also invited criticism especial, when Group of Experts (GoE) led by noted economist Montek Singh Ahluwalia suggested the government to enhance its revenues by hiking the duties on excise as one of the measures of fill its coffers.
The state is facing a revenue shortfall of Rs 26,000 crore, which is 30 per cent of the total budget revenue estimates, for the current fiscal. The government is already not getting GST compensation from Centre.
While a few are upset, there are others who feel the government has still taken into account the competition.
“The hike in export fee has not been much. The other states have much more fee than us. Just compare Haryana’s levies. Their export fee on ENA is Rs 150 for every case of liquor while we have to pay Rs 44 in Punjab. This was quite reasonable. All other states like Rajasthan and UP also have higher fee than Punjab,” said Rana Inder Singh, a distiller.
GoM FOR WAIVING OFF LICENCE FEE
A few months after waiving off license fee of liquor contractors in the state during lockdown became a hot issue in the state with a few ministers and MLAs opposing it, a Group of Punjab Ministers has decided to recommend a fee waiver for bars, hotels and restaurants in the state, for six months from April to September, in view of losses suffered due to pandemic.
If the CM accepts the recommendation, the waiver will cost the state Rs 12 crore. The decision has been taken by GoM comprising Finance Minister Manpreet Singh Badal, Housing & Urban Development Minister Sukhbinder Sarkaria and Forests and Printing & Stationery Minister Sadhu Singh Dharamsot.
Similarly, quarterly assessed fee for the first two quarters from April-June and July-September, 2020 to be charged from the bars may be waived off, they have decided to suggest to the Chief Minister.
The Group took the decision after a meeting with representatives of Hotel & Bar Associations and Marriage Palace Associations here on Monday, according to an official spokesperson.
Due to the Covid-19 pandemic, the hotels, restaurants and marriage palaces are closed since March, 2020, due to which the associations said they were suffering heavy losses. Till date, business activity was at a standstill, they represented to the Group of Ministers.
The associations also demanded that the timings for opening of Bars/holding of functions etc. should be increased upto 10 PM. It was decided that the issue of extending the timings will be taken up at the next meeting of the Cabinet, scheduled for Wednesday .
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