Liquor makers urges Kerala Govt not to impose additional sales tax on IMFL

Liquor makers have urged the Kerala government to not impose additional sales taxes on the Indian made foreign liquor (IMFL) which already attracts steep levies of up to 240 per cent in the state.

In a letter to the Kerala government, the Federation of Alcohol Beverage Producers (India) has noted that IMFL is paying high taxes of up to 240 per cent in Kerala in comparison to imported liquor which is taxed at 88 per cent.

"As a result, a product of same quality sells at Rs 2,600 if made in India compared to Rs 1,600 if imported," said the association in a letter to the state government.

The association further said that the state government is expected to impose an additional sales tax of 35 per cent on IMFL, and not on imported liquor.

“This is in our view is taking the matter to bizarre proportions. Just to give you a reference after this the tax difference between the two will go to an incredible 189 per cent. Instead of rectifying the error, the Government is further compounding it,” the association's Director-General Vinod Giri said.

Recently, several state governments imposed additional taxes on liquor while allowing sales in the third phase of the lockdown. Liquor sales remained suspended for more than 40 days in the first two phases of the lockdown to contain coronavirus panedmic, hitting state revenue.

"We reiterate our earnest request to review the Excise Policy of Kerala and issue necessary amendments to remove blatant discrimination in favour of imported products,” the association said.

Earlier, alcoholic beverages industry bodies had said that levy of additional taxes on liquor by several state governments, as high as 75 per cent, will be counterproductive in the long run.

States like Andhra Pradesh, Delhi and West Bengal have imposed 75 per cent, 70 per cent and 40 per cent additional levy respectively on liquor, which resumed window sales from May 4 after a gap of almost 40 days in during the ongoing lockdown.