Nov 02: After increasing the price of wine and liquor across the board by 25% in April during Covid-19 Lockdown, the West Bengal government has reportedly agreed to practically withdraw the increase because of loss of revenues due to a crash in sales, introducing 22 new slabs for wine and beer across all categories after rationalising the price structure, effective November 1.
Der aaye, duroost aaye!! An old saying goes, ‘late in coming, but welcome return!’
Rather late in the year but the West Bengal government has apparently conceded that the increase of special Tax of 30% on the MRP of wine and liquor imposed in the second week of April when lockdown was in force due to Covid-19, was excessive and in any case the time has come to roll it back.
Reason! The move had resulted in a steep decline in wine and beer sales in the state to the tune of 40 per cent as compared to the previous year during this time, according to Vinod Giri, the Director-General of Confederation of Indian Alcoholic Beverage Companies (CIABC).
Also Read : Andhra may reduce Covid Tax on Alcohol
The result was similar to what happened in Delhi when the local government increased the prices by 75% of the MRP when the government announced opening of sale of wine and liquor in Delhi on May 4, with a huge rush of people to these shops for the first couple of days, because drinkers were really thirsty for alcohol after 5 weeks of non-availability-and this was misinterpreted by the government as huge latent demand from people who would be willing to pay exorbitant prices for liquor. The sales took a South-ward direction and the government removed the additional tax last month. This also resulted in huge escalation of prices in the adjoining city of Haryana-Gurgaon where the price increase was only marginal.
The state government of West Bengal had apparently levied the surcharge to boost the excise revenues which failed to materialise. Giri said most of the prices of various brands had gone up, which proved to be detrimental to the liquor industry in the state. According to the Report in PTI, he attributes the revenue drop to this reason alone. "Owing to this, people are being forced to switch over to country spirits and everyone has been scaling down the value ladder due to the price rise", he says.
Also Read : Wine Excise Policy 2020-21 for Chandigarh extended with no Tax Increase
The revised price structure of liquor brands to be sold through the retail route in the state came into effect from yesterday, according to the report. The government has made 22 new slabs for wine and beer across all categories after rationalising the price structure, says PTI.
Giri said representatives of the association met the state Finance secretary and Excise commissioner and urged them to revisit the price structure. “The government has been very receptive and indicated that it would visit the price structure in view of the ongoing festive season", he said.
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Retailers having old price tags will be allowed to sell as previous prices till stocks last. So the consumers may have to wait for some time before the new structure comes into effect practically. The authorities also might want to monitor the price on labels of new stock as some smart retailers could put the old tags at higher prices; one has seen it on rare occasions when the prices are reduced in the current year.
Subhash Arora
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