Deviating from its traditional liberal excise police, UT administration on Thursday approved a hike in value added tax (VAT) on liquor from 4 to 12.5%, thus dipping the spirits of those who love their peg which will now cost dearer.

As UT administrator Gen (retd) SF Rodrigues okayed the new excise policy for 2009-10, broad outline of which was chalked out at a meeting convened by adviser Pradip Mehra last week, it was reportedly decided to hold back the formal announcement for a day though the file had reached Mehra by late evening.

Himachal Pradesh and Punjab had recently written to the administration to raise VAT to check inter-state smuggling. The excise policy is aimed at promoting consumption of high-quality liquor, while making its purchase hassle-free, said a UT official.

A similar proposal to bring VAT on par with Punjab had been shot down by the administrator in July last year with the argument that it was made mid-term and proper procedures had not been followed. However, this time, he is believed to have put his stamp on all proposals made by the excise and taxation department which has recommended extending bar-timings from midnight to 1 am and doing away with seeking of permission for serving liquor at night parties. There are plans to bring down the number of liquor vends in the city from last financial year?s figure of 215, said sources.

Even though the city already has smart shops in malls and multiplexes, Manjit Brar, additional excise and taxation commissioner, said that it has been proposed to encourage the trend in view of high investments involved. Sale of wine at department stores is already allowed in Chandigarh, with Haryana government also incorporating this in its excise police now, Brar added.

It has also been proposed to allow exclusive beer and wine shops in the city so that people opt for low-alcohol drinks. License fee for liquor shops in villages and slum areas can go up to discourage vends,said sources, adding, for the last two years, the emphasis has been to wean away people from hard liquor to low-content alcohol such as beer and wine by making their availability relatively easier, to promote decent and dignified premises for sale and consumption to encourage responsible drinking habits and create an environment where drinking is subject to regulation of domestic budget.