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Govt thinks over new liquor tax
September, 21st 2011

Demands for a scrapping of or a change in a new model adopted by the state government for collecting excise on liquor are increasing within the government. As per the model, which became effective from April, there is a 20% levy on liquor sales in hotels of category four stars and above. This is above the tax levied on the manufacturer or the importer, who pays up to 50% of the actual sale price of liquor or 25% of its MRP, whichever is less. While the tax for lower category hotels, bars, restaurants and clubs is 5%, they cannot claim any setoff.

Along with an increase in central taxes, the new model has led to a steep rise in prices of country liquor, beer and foreign-made spirits. This in turn has led to a drop in consumption. Latest statistics provided by the excise department indicate a 6% drop in beer sales, a 5.5% drop in foreign spirit sales and a 3% drop in country liquor sales.

At a review meeting convened by state excise minister Ganesh Naik on Tuesday, officials highlighted the concern that the drop in consumption of branded liquor could cause a spurt in the consumption of spurious liquor. With liquor rates in neighbouring states way below those in Maharashtra , another concern pertains to a spurt in smuggling.

Sources indicated that Naik and his minister of state Rajendra Mulak would soon meet chief minister Prithviraj Chavan and deputy chief minister Ajit Pawar to discuss the pitfalls of the new model.

Anti-liquor lessons in schools:

The government plans to introduce in the school curriculum chapters discouraging liquor consumption as part of its de-addiction campaign, social justice minister Shivajirao Moghe said on Tuesday. Also, Naik has asked the excise department to find a brand ambassador to promote the campaign. The state will observe a de-addiction week from October 2.

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