Telangana Govt Eyes On A Steep Rise In Revenue From Liquor Refuse To Reduce Vat On Fuel

The Telangana state administration, controlled by chief minister K Chandrasekhar Rao, has officially stated that it will not reduce the Value Added Tax (VAT) on gasoline and diesel this year and instead plans to increase revenue from liquor sales.

The Telangana government's main sources of revenue have been liquor sales and VAT on gasoline and fuel. The state administration gained 27,888 crores from alcohol in the guise of state excise and licence fees in 2020-21, and another 10,000 crores in the guise of VAT from gasoline and diesel.

Although rejecting to decrease the Value added tax on petrol and diesel in line with the Centre's price reductions on November 4, the Telangana administration has chosen to add additional 404 retail wine stores to the state. There are currently 2,216 commercial alcohol shops in the state, with that number expected to rise to 2,620 shortly.

The state administration published a notice on Tuesday inviting bids for new wine shop licences, which will be valid for two years starting 1st December 2023. Requests for licences will be accepted until 16th November, and wine stores will be assigned through a lottery to be conducted by the regional authorities on 18th November.

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Provisional liquor store licences will be granted on 20th November, and the certificates will go into effect on 1st December, according to the announcement.

On issuance of the licence, candidates for wine store licences will have to pay a non-refundable charge of 2 lakh, as well as an annual retail excise tax of rupees five lakh. Every year, you can pay this tax in six instalment payments. Candidates can register for much more than one store, apart from in the past, by paying a different application cost for every shop.

According to an administration directive published on Saturday by the excise department, a retail liquor store vendor who wants to transform the shop into a walk-in store allowing the area to consume liquor would have to pay an additional 5 lakh each year.

The decree further said that 10 per cent of store allocations will be reserved for Scheduled Castes (SC), 5 per cent of the total for Scheduled Tribes (ST), and 15 per cent of the total for the Goud tribe, an OBC class engaged in the alcohol trade.

To raise more money, the state administration issued permits for 159 additional bars around the state in January of this year, in addition to the current 800 bars and 27 clubs and pubs that offer alcohol.

According to an excise department employee aware of the situation, the state-wide lockdown enforced throughout the Covid-19 epidemic period in 2020 and this year had a significant impact on the liquor business. Nevertheless, the income flow was not significantly impacted because the rates of Indian Made Foreign Liquor (IMFL) were hiked by 16 % last year, in addition to a flat rise of 30 dollars on all types of beer.

Furthermore, throughout the holiday seasons, the intake of booze increases dramatically. As a result, the money from booze sales increases year after year, according to the authority. The revenue from liquor was 10,833 in the first year of Telangana's creation and increased to 27,888 in 2020-21.