GAJENDRA SINGH NEGI/ Dehradun
The persistence of the Finance department and the pressure exerted by it on the Excise department on imposing value added tax (VAT) on sale of liquor in the State could prove counterproductive to the State government.
The Excise department has decided to impose 12 per cent VAT on the excise duty on liquor from December 15 which will make liquor costlier in the State. It is expected that the liquor aficionados will have to shell out Rs 40 to Rs 100 on purchase of every bottle of liquor in the State. The Excise department is hoping that the imposition of VAT on liquor sale will result in an increase of about Rs 50 crore in its annual revenue. However, those, versed with the dynamics of the business, point out that increased liquor price could actually end up in a net loss for the State exchequer. “The addition of VAT will further increase the difference in the cost of liquor in our State with neighbouring Uttar Pradesh, Himachal Pradesh, Haryana and Delhi. The liquor in our State is already costlier than other states. Being a State having porous borders and high influx of tourists, the flow of cheap liquor from neighbouring states is likely to increase resulting in drop in sales and revenue in Uttarakhand,” said a department official.
Pertinently, the Excise department had removed VAT on the liquor in the State following the provision made in the Excise policy-2025-26. However the Finance department objected to the move and it has now ensured that the VAT is imposed on sale of liquor in the State.
The Excise department was given a target to collect a revenue of Rs 4,400 crore by the State government in the FY 2024-25 against which the department collected a revenue of Rs 4,360 crore. Impressed by the performance, the government further hiked the target to Rs 5,060 crore for the current FY.
The Excise commissioner, Anuradha Pal told The Pioneer a timeline for imposing 12 per cent VAT on excise duty till December 15 has been given. She added that the department is on the path of achieving the revenue target this year as well.
