Rajasthan hikes liquor prices to ‘mitigate natural and man-made calamities’

The Rajasthan government has increased liquor prices for “mitigating natural and man-made calamities and public health exigencies”, according to a notification issued by the finance department.

The notification issued on Tuesday said a surcharge of up to Rs 30 will be charged on retail prices of foreign liquor, beer and country liquor.

The surcharge on Indian-made foreign liquor (IMFL) will be Rs 5 for 180 ml and 375ml bottles, breezers, and miniature and other packaging, and Rs 10 on 750 ml bottles. For beer, Rs 20 will be charged for 650 ml and 500 ml bottles and Rs 5 for 330 ml bottles and other packaging.

A surcharge of Rs 1.50 has been levied on every bottle of country liquor and Rajasthan-made liquor (RML), namely Royal XXX Rum, Royal Vodka and Royal Classic Whisky.

An official of the finance department, who didn’t want to be named, said the new measure might fetch the government around Rs 500 crore to Rs 600 crore, provided the sales volumes are constant or at least the same as last year.

“However, the sales have declined by 50%, largely due to the economic slowdown caused by Covid-19, and it may be difficult for the government to mop up the expected revenues,” he said.

The notification stated: “The surcharge will be charged for the purpose of mitigating natural or man-made calamities like drought, flood, epidemic, public health exigencies, fire, etc.”

Earlier, the government increased excise duty on IMFL and the basic license fee on country liquor on April 29. The bottling fee too was increased.

According to the Rajasthan Excise (Second Amendment) Rules of 2020, the additional fee to bottle IMFL having ex-distillery price (EDP) below Rs 900 was increased by Rs 5.50 per bulk litre. For IMFL which has an EDP of Rs 900 or above, the fee was raised by Rs 11 per bulk litre.

The notification also increased the basic licence fee for the sale of country liquor from Rs 10 to Rs 20 for one bulk litre.

In another development, the department amended the notification of 1997 to the Rajasthan Excise Act, 1950, to increase the additional fee. This has been increased from 25% to 35% for IMFL with EDP below Rs 900, and from 35% to 45% for IMFL with EDP of Rs 900 or above.

The additional excise duty on beer was also increased from 35% to 45% of the sum of ex-manufacturing unit price, CST and Export Fee, excise duty, and actual cost reimbursed by the Rajasthan State Beverages Corporation Limited.

Rajasthan’s annual excise revenue target is about Rs 15,000 crore - Rs 12,500 crore from excise and Rs 3,000 crore from sales tax.