The Karnataka government, which presented its last Budget before the high-octane state election on Monday, has announced hiking excise duty on liquor by 8%. The Karnataka Budget 2018, was presented by Chief Minister Siddaramaiah for the record 13th time. Media reports also said that the Value Added Tax (VAT) has also been increased beer, wine and hard liquor.
The chief minister increased the existing rates of additional excise duty on Indian-made foreign liquor (IMFL) by 8% from the second slab to the 18th slab. The government has targeted the excise department to achieve Rs 18,750 crore in the financial year 2018-19, while the revenue target of the department in the 2017-18, which was Rs 18,050 crore, was achieved by Rs 14,572 crore at the end of January.
The decision to hike the duty on IMFL was done after more than 3,000 licenses were affected and never renewed due to the decision of the Supreme Court of India to ban liquor shops on highways in July, August and September.
“The apex court order was implemented and such non-renewed and closed licences were renewed in the subsequent months. For this reason, we expect to mobilise revenue of Rs 17,600 crore for the current financial year,” he said. Siddaramaiah said that the government is hoping to mobilise revenue of Rs 17,600 crore in the current financial year.
In the last Budget too, the Karnataka government had hiked the additional excise duty on liquor to 21% from 18%, while abolishing VAT of 5.5% on beer, wine and hard liquors. This led to an increase in the price of liquor between 4% and 12%.
Recently Kerala too announced a hike in alcohol prices. State Finance Minister Thomas Issac announced that the liquor price in the state will go up as the tax on liquor price up to Rs 400 was hiked to 200% and the tax on liquor price Rs 400 was hiked to 210%.