Liquor has always been an integral part of any country’s/state’s economy. When it comes to India, it has one of the fastest-growing alcoholic beverage markets globally. An increase in the urban population and middle-class families possessing more spending power have contributed a lot to the Indian alcohol market. In 2016, an average Indian consumed around 5.6 litres of alcohol per year. This statistic was expected to become around 6.7 litres by 2021. While there are lots of alcoholic brands available in the country, the most important ones with consideration to the economy are the imported liquor brands. There are certain tax laws imposed on these imported liquors and every once in a while, these laws are subject to enormous changes which bring about a good turn for the consumers as well as the government.
November 2021 :
2021 has certainly contributed to a lot of spontaneous changes and one of them is the new decision taken by the Maharashtra Govt. Originally where the excise duty on imported liquor was 300%, the new decision has reduced this by a whopping half. Imported liquor is going to become cheap with excise duty being brought down to 150% of the manufacturing cost. This is an attempt by the govt. to be at par with other states in terms of excise duty.
“The new notification will reduce MRP on imported whisky by around Rs 1,500-2,000. It will put liquor rates on a par with other states.”– Valsa Nair Singh, principal secretary of the state excise department.
Wonder what benefits this imposed decision brings for the country? It curbs interstate smuggling and bootlegging. This will also end the entry of illegal liquor into Maharashtra which was a major issue since the past few years. The excise department would be able to stop non-duty paid liquor sales in addition to terminating the grey market successfully.
“Our vigilance squad has been taking action on the smuggling and black marketing of imported liquor. A survey by our department also revealed the huge smuggling and black marketing. So, we have decided to slash the excise duty. Now, we hope that sales will go up,”An official from the state excise department.
According to officials, during the financial year 2016-17 to 2018-19 the excise revenue from imported liquor was around 200 crore. This revenue dropped to 100 crore during 2019-2020 to 2020-2021. One would think this dip in revenue happened due to Coronavirus. But overall people didn’t stop consuming alcohol due to the pandemic. The sudden rises in tax sales urged the drop-down in sales. The formula used for calculating excise duty earlier imparted an increased amount of tax burden which directly affected the revenue and the volume of sales. “With this tax cut, we expect the volume and tax revenue to grow,” said officials.
“We expect that the sales will go up from the current 1 lakh cases per year to 2.5 lakh cases per year. The revenue is expected to increase from Rs 100 crore to Rs 250 crore,”Valsa Nair Singh, principal secretary of the state excise department.
A major difference in the cost :
Now that we know what happened and why it happened, let us look into the cost changes of some major brands:
- The famous vodka brand – Absolut vodka dropped from ₹2820 to ₹1790.
- Smirnoff Triple Distilled by Diageo dropped from ₹1110 to ₹820
- A popular brand of scotch whiskey – Black Dog Triple Gold Reserve dropped from ₹3500 to ₹2330
- The best of Scotland in every bottle – 100 Pipers Deluxe Blended dropped from ₹2390 to ₹1690
- That one scotch which is classic for a reason. Chivas Regal 12-year-old blended dropped from ₹5400 to ₹3500
- The world’s no.1 Irish whiskey brand – Jameson Irish Whiskey dropped from ₹3030 to ₹2200
- A popular blended scotch whiskey – Antiquity Blue Ultra-Premium dropped from ₹1610 to ₹1070
- Unique single malt scotch- Glenlivet 12-year-old Single Malt dropped from ₹5900 to ₹3360.
This indeed is a heavy relief for consumers and is a great initiative to increase the volume sales. With that being said, According to Valsa Nair Singh – this reduction will only apply to imported liquor brands bottled and packed in the country of origin, and not to those international brands that are bottled in India. It also does not apply to Indian Made Foreign Liquor brands. The new excise rates have come into effect from the date of the notification, on November 18.