Bengal govt hikes excise duty: beer, IMFL to be Rs 20-30 costlier

The move from the state government comes as it looks to boost its finances to fund various social security schemes. To this end, the government had increased stamp duty.

In Financial Year 2022-2023, the government made Rs 16,266 crore in excise duty, and in FY 2023-2024, the figure was over Rs 18,000 crore. The government is now looking to increase revenue from excise duty to over Rs 20,000 crore to meet the requirements of various schemes.

According to sources in the administration, from FY 2024-25, the state government has to allocate Rs 26,000 crore to the Lakshmir Bhandar scheme for financial assistance to women from economically weaker sections, Rs 6,500 crore to Krishak Bandhu scheme for financial assistance to farmers, around Rs 10,500 crore to the Jai Bangla pension scheme, and almost Rs 1,500 crore to the Kanyashree scheme for girls’ education.

A senior government official said, “Government now has an expenditure of more than Rs 50,000 crore every year in different social welfare schemes. Other than that, the government has extra expenditures like payment to puja committees, club-aid, etc. To meet such huge financial liabilities the government took Rs 73,000 crore loans in FY 2023-24. This year, this loan estimate is Rs 80,000 crore. In this situation, the government has to increase revenue and excise and stamp duties are the only options.”

An official of the state Excise Department said, “We made minor tweaks in the price of country made liquor, otherwise the increase in the price of beer will cause an increase in consumption of country liquor. That is not desirable.”

The official said attempts to increase revenue through measures such as keeping liquor shops partially open on dry days did not have the desired effect. “So, we were forced to increase the price of liquor to meet our financial expectation,” said the official.

Stamp duty exemption was also withdrawn from July 1. In a notice announcing this, the government had said: “To combat the economic slowdown due to the Covid-19 pandemic and to provide stimulus to commercial activities and relief to the home-buyers of the state in the public interest, the state government decided to temporarily reduce the rate of stamp duty by 2% and the Circle Rate by 10% in West Bengal.”

“The matter has been reviewed further and considering all aspects, the Governor, in the interest of public service, has now been pleased to decide that both the above mentioned schemes for remission of stamp duty and reduction in circle rate shall be discontinued with effect from 01.07.2024,” the notice added.

A senior official said, “After reducing stamp duties, revenue increased because pending registrations had been done. Gradually, in the last two years, that increase in revenue slowed down… We are expecting at least Rs 1,000 crore revenue increase this year.”