April 20: It appears Delhi government has been working very hard even during lockdown with the excise department shutting itself in a corner and issuing a Circular 2 days after the Notification by the Ministry of Health Affairs banning sale of liquor and a day before Delhi Chief Minister Arvind Kejriwal reiterating continued the ban, and has come up with the directions for continuation of the License for 2019-20 for 3 more months for now on depositing license fee from April 1 on prorate basis
At a time when there have been no sales allowed in Delhi since March 22 and at least till May 3 there is a complete lockdown and at a time when the retail, restaurant business and the distribution is at total standstill and several businesses are expected to close down, the tax revenue conscious department of Delhi has issued the Circular dated 17 April, 2020; it says that the Authority has ‘extended the validity of existing L-1/L-1F/L-2 Licenses for the sale of liquor brands registered as per approved terms and conditions for 2019-20 at their existing price up to 30.6.2020’.
The circular has confounded the distributors who have had their arms up in the air and in fact are hoping to get a refund of the excise paid from March 23 till the date the sales would be allowed again and they even hope for a reduction of the label registration charges to kick-start the sale of wine and liquor.
Despite the loss of excise revenue of Rs. 17,500 crores in India due to ban on sales, the circular serves to demonstrate an example of bureaucratic procedures in India.
One can only hope that the government would allow the sale of alcoholic products soon and that the Ministry of Home Affairs would consider the relaxation in the rules. The black market and bootlegging is rampant and there have been even several cases of robbing and looting shops all over India-including Delhi.
Haryana Policy
Meanwhile, Haryana had punctually announced last month its policy for 2020-21, in the process dismantling the practical monopoly of the last 3 years by reducing the license fee from the monopolistic effectively Rs. 64 crores to a minimum of Re. 1 crore only per distributor and hoping to appoint 10-15 distributors, earmarking areas with targets for sales and different license fees for each of these defined areas. Three distributors including Lake Forest had already applied for the distribution license for which the last date of application was March 31. Due to the lockdown, the licensing procedure has been suspended and stays so as on date, according to sources.
Under the circumstances, release of the Circular by the Delhi government when no sales are allowed, provides but a comic relief to those not involved directly in the business and confusion, uncertainty and stress for those who are. Incidentally, since last year, the license fee of Rs. 7 lakhs (wine and beer), Rs. 15 lakhs (liquor) and Rs. 22 lakhs for all-inclusive alcoholic -beverages, is adjustable downwards by the amount paid for such renewals as in the current circular till the new policy is announced, but the label registration charges of Rs. 60,000 for each imported wine label is still not adjusted downwards, keeping the policy skewed against the distributors with L-1 F license, and eventually passed on to the hapless consumers.
To put thinks in the proper perspective, if the lockdown were to continue till June 30 (one hopes this would not be the case), one has to pay Registration charges of labels of Rs. 60,000 each along with the license fee of Rs. 1.75 lakhs for 3 months , with NO sales at all, according to the present Circular.
Subhash Arora
Circular
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