The AINRC government reeling under a financial crunch has been contemplating the introduction of sales tax on liquor replacing the additional excise duty in existence taxed at 35 per cent to enhance revenue.

This was one of the key items discussed in the? marathon cabinet meeting held from 7 pm on Monday to 3 am on Tuesday under the chairmanship of chief minister N Rangasamy.

Sources said that though the government had not clarified on the decisions taken at the meeting, it is likely to take place.The government is well short of targeted? tax revenue of `2229 crore as per the budget estimates. From sales tax and excise duty the collection was `937 crore in comparison to the targeted `2022.83 crore. Through sales tax, the main source of revenue , `647 crore? (`474 from VAT and `173 crore from CST) has been the collection up to November? as compared to targeted revenue of `1244.83 crore, while from excise, the revenue generated was `290 crore in comparison to targeted `778 crore.

With only three months to go before the close of the financial year, the trend of? realisation indicates that it would be well short of coming anywhere near its targeted revenue by taking into account all other smaller sources; government has been? only able to mobilise 38 per cent of the targeted revenue up to November, though 66 per cent should have been realised, said P Lakshmanasamy of Puducherry Government employees central federation. ?
Though for political reasons, Rangasamy has been reluctant to revise the tax structure or levy fresh taxes, the government could enhance its revenue by taking over? the sale of liquor through a government marketing corporation as in the other southern states. ?

Another option of raising revenue is by?? auctioning the IMFL licences annually through Internet bidding

However at this stage the budget would be revised to a smaller size? which is achievable based on the revenue it can generate in the next three months.