Karnataka hikes excise duty on liquor by 11 percent

The Karnataka government on Wednesday hiked excise duty on liquor by 11 per cent to mop up revenues, two day after allowing its sale, following the easing of COVID-19 induced lockdown.

This hike is in addition to the six per cent that was announced in the budget.

"Yes, this 11 per cent increase in excise duty is in addition to the six per cent announced in the budget," Chief Minister B S Yediyurappa told reporters here.

According to sources, the hike will translate into a consumer paying Rs five more for an 180 ml bottle of liquor.

The hike is applicable on brandy, whisky, gin and rum, but not to beer, wine, toddy and feni, they said.

The government had allowed CL-2 (retail shops) and CL-11C (state-run retail shops such as MSIL) to sell liquor between 9 am and 7 pm only in areas that are outside COVID-19 containment zones from May 4.

The third day of liquor sales in the state on Wednesday after easing of lockdown curbs Rs 231. 6 crore worth spirits were sold.

According to top Excise Department officials, 39 lakh litres of Indian-made liquor worth Rs 216 crore and 7 lakh litres of beer worth Rs 15.6 crore was sold on Wednesday.

On the first two days- Monday and Tuesday, Rs 45 crore and Rs 197 crore worth liquor was sold respectively.

Responding to criticism by certain sections, claiming lack of preparation before allowing liquor sale, Yediyurappa with a laugh said, "When there are people to drink, what preparation is needed?

State Excise Minister H Nagesh had recently pegged the losses at Rs 60 crore per day because of closure of liquor shops due to the over 40 day lockdown.

With excise alone accounting for about 18 per cent of Karnataka's own tax revenue, the move is aimed at improving its precarious finances that has been further affected due to lockdown.

In the 2020-21 budget, the government had increased Additional Excise Duty on IML (Indian Made Liquor) by six per cent across all 18 slabs and had fixed the excise department's revenue target at Rs 22,700 crore for the 2020-21 fiscal.