Following the lead from states like Delhi and Goa, Kerala Wednesday effected a major hike in liquor prices by raising the duty on all brands. While beer and wine brands will see an increase in retail prices by 10%, other IMFL categories will see a hike of up to 35%, a top official of Kerala State Beverages Corporation (BEVCO) confirmed.
The decision was taken at the cabinet meeting chaired by Chief Minister Pinarayi Vijayan Wednesday and an ordinance to the same effect would be released to effect the hike. The move was expected as the state has been struggling to shore up its finances in the backdrop of the Covid-19 lockdown and the general downturn in the economy. Through the tax hike, the state is expected to garner in additional revenue of Rs 700 crores.
Liquor sales, steadily climbing over the years, has been one of the prime sources of revenue for the Kerala government. In 2018-19, the state-run BEVCO, through its over 300 retail outlets, reported sales of Rs 14,502 crores, with festival periods like Christmas-New Year and Onam bringing in heavy crowds. Every time the state faces financial uncertainty, successive governments have increased taxes on liquor, with no threat of backlash from tipplers. Even during the 2018 floods, retail liquor outlets of BEVCO cashed in huge profits from sales.
However, with the third phase of lockdown set to conclude on May 17, the state government has not made up its mind yet on opening liquor retail outlets, bars and beer parlours. Large crowds seen in front of such outlets in Maharashtra, Karnataka and Delhi in recent weeks are likely to repeat in Kerala and the government does not want that to happen. While dine-in facilities at bars and beer parlours are not likely to get a nod, the government may go in for takeaway counters at such bars. This will help reduce the lines in front of retail outlets.
The excise official said BEVCO is pondering a proposal to have a virtual queue system and that there are a number of startup firms who have applied for tenders for the same. However, the nod has to come from the state government, he said.
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