New Delhi: State governments find solace in the sale of liquor as the funds received from the taxes can now be used in the ongoing coronavirus pandemic, which is the need of the hour, as the Centre has lifted the ban on standalone liquor stores in different states in the country, including red zones, in phase three of lockdown.
Uttar Pradesh registered sale of alcohol of over Rs 100 crore as tipplers queued up at liquor stores on day one, an official said on Tuesday. Several shop owners had to shut down by Monday afternoon after they ran out of stock. The average daily sale of liquor in the state in normal times is around Rs 70-80 crore. According to Excise Department officials, the sale of liquor in state capital Lucknow was recorded at Rs 6.3 crore on Monday, the first day of the start of the third phase of the lockdown that ends on May 17.
Principal Secretary, Excise govt. of Uttar Pradesh, Sanjay Bhoosreddy said: “I don’t think there would be any single industry with just less than one lakh workforce that gives Rs 100 crore revenue (to the state exchequer) in a day.” The liquor sellers’ association pegged the figures at over Rs 200 crore, adding that about 75 per cent of the amount would have come from the sale of Indian-Made Foreign Liquor or beer.
More than 25,600 liquor shops in Uttar Pradesh remained closed for around 40 days after imposition of the lockdown from March 24 midnight, causing a huge revenue loss to the state.
Kanhaiya Lal Maurya, secretary of Lucknow Liquor Sellers’ Association, said: “The sale of country liquor was minuscule in cities as the labor class, which usually purchases it, had either left for their villages or has no money. The sale would have been higher in villages, but there too, money may have been a constraint.”
Meanwhile, Bhoosreddy said that a cap on individual purchase on liquor had been imposed to prevent hoarding. A person will not be allowed to purchase more than one bottle (750 ml), or two halves (375 ml each), or three quarters (180 ml each), or two bottles of beer or three cans. This is being implemented only for the first 2-3 days, he said. Liquor production had started about two weeks ago and supplied to wholesalers would remain uninterrupted. Wearing face masks has been made compulsory. People without masks will be pulled out of the queues. Shops have also been directed to keep hand sanitizers, the official added.
The reopening of the liquor stores come as a huge aid to Punjab which had received only a meager amount of Rs. 71 crore last month as the coronavirus fund amid claims by Harsimrat Kaur Badal of Rs. 832 crore being given to Punjab to fight COVID-19. Punjab Finance Minister Manpreet Singh Badal on Thursday asserted that except the small sum Rs 71 crore, the BJP-led government has not given a single penny to the state. He discredited Ms. Kaur and asked her not to play petty politics on coronavirus.
Punjab will begin home delivery of liquor after the 9 am-1 pm opening hours. Instructions in this regard have been issued by the Excise and Taxation Department. Liquor vends in the state are to reopen on May 6. Having incurred Rs 500 crore excise duty losses in April, by allowing home delivery between 1 pm and 6 pm, the government hopes to boost liquor sales, hence enabling the licensees to pay pending excise duty.
“When the lockdown was announced, old licensees were granted an extension and they paid 60 percent of the fee. The remaining had to be paid in the last week of March,” explained Vivek Pratap Singh, Excise and Taxation Commissioner government of Punjab. “Also, if liquor is home-delivered, it will prevent crowding at the vends,” he added.
Meanwhile, Maharashtra reported a sale of at least 5 lakh liters of liquor. Although the exact sales figure was not immediately available, the long queues outside these shops in various parts of the state give an approximation of the funds generated by the sales. Usually, Maharashtra reports around 24 lakh liters of liquor sales per day but on Monday, the sale was only about one-fourth of that.
On the other hand, the manufacturing of liquor has been restarted in rural parts of the state. For instance, it restarted in Walunj MIDC in Aurangabad, Baramati MIDC in Pune district, and some other pockets.
On May 4, Karnataka’s revenue department made a record collection of Rs 45 crore in one day. Over 1,500 liquor stores across the state sold an estimated 3.9 lakh liters of beer and eight lakh liters of Indian Made Foreign Liquor (IMFL). While the department registers the sale of liquor worth Rs 65 crore every day, the May 4 business is considered huge as only two license holders (takeaway outlets and MSIL) are allowed to function and more than 10 other license holders, including pubs, clubs, and restaurants are closed.
As for the national capital Delhi, it will show a hike in liquor cost from May 5 as the government has decided to impose a 70 percent ‘Special Corona Fee’ on its sale, sources said. The move will boost government revenue, which has been hit hard due to the coronavirus-forced lockdown. 70 percent ‘Special Corona Fee’ has been imposed on the MRP of liquor bottles. The new rate will be applicable from Tuesday,” sources added.
Meanwhile, the Andhra Pradesh government has enhanced prices of liquor by another 50 percent on May 5, only a day after imposing a 25 percent hike as shops were reopened in relaxation of the ongoing lockdown. Special Chief Secretary (Revenue) Rajat Bhargava said the abnormal increase in liquor rates was to ‘discourage’ people from consumption and safeguard health.
The enhanced rates would come into force with immediate effect, he said. The state government also decided to open liquor outlets from 12 noon, instead of 11 am, till 7 pm. Sources said the fresh hike (50 percent) in rates could fetch additional revenue of Rs 9,000 crore per annum to the cash-starved state government. The entire liquor business in AP is controlled by the state government through its own retail outlets, numbering 3,468.
Excise and sales tax on alcohol are major revenue sources for the government. The state collects around Rs 2,600 crore in revenue from liquor sales. The decision behind reopening the shops had much to do with dwindling revenue.
Liquor manufacturers pay the government excise duty and sales tax once their produce leaves for godowns of wholesalers. At present, the stock being sold was produced in February and the levies were thus paid back then.