Assam looks up to booze to save the state

Assam looks up to booze to save the state

Assam is looking up to the tipplers to save the state from economic meltdown by first opening up the liquor shops and then levying 25% additional tax raising that demand of liquor is continue to be very high

The Assam government last night increasedthe excise duty on liquor which will see their prices go up by 25 cent. Themove will earn the fund-starved State exchequer an additional Rs 1,000 crore.

The decision was taken by theState Cabinet last night, days after increasing the taxes on fuel. The Cabinetmeeting was held through video conference.

Across the country, the state governmentsare increasingly relying on alcohol revenue to pay their bills. Roughlyone-fifth of most State government budgets are funded by booze. And, that shareis going up by the year.

With the exception of Gujarat,Nagaland, Mizoram and Manipur, where liquor is officially prohibited, alcoholrevenue takes the second, third or fourth place in terms of contributions to aState's coffers.

Take, Tamil Nadu, for instance;in the last financial year, the Tamil Nadu State Marketing Corporation(Tasmac), the government-owned IMFL monopoly, alone paid a whopping Rs 21,800crore into the government kitty. In Kerala, where 22 per cent of the totalgovernment revenue came from the bottle, the total excise and commercial taxrevenue from alcohol (IMFL and toddy) was close to Rs 8,000 crore.

However, alcohol taxationstatistics are woefully inadequate and complex as revenue from liquor goes tomany accounts in many departments, such as Excise and Commercial Taxes. Salestax, Excise duty, import fee and education cess are some of the various formsof alcohol revenue.

Governments often project exciserevenue alone, but sales tax is much more than Excise. In States such as TamilNadu, Kerala and Delhi, where the wholesale and retail liquor business is undergovernment control, alcohol revenue is relatively easy to reckon. In AndhraPradesh, Orissa, Bihar, Chhattisgarh, Rajasthan, Uttarakhand, Uttar Pradesh,Karnataka and Bihar, governments run the wholesale business, leaving retail toprivate players. Maharashtra's liquor business is in private hands.

In Karnataka, where thegovernment is in the wholesale business, Excise revenue is currently 20 percent of State revenue. West Bengal's Excise revenue in the last financial yearwas Rs 2,600 crore, up from the previous year's Rs 2,100 crore. Viewed againstthe State's total revenue collection of Rs 32,000 crore in 2012-13, the Excisecollection was only around 7 per cent. However, the Excise figures alone do notshow the whole picture as industry estimates that the sales tax on potablealcohol last year was Rs 1,400 crore.

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