The state government is pulling up its socks to collect more money from the liquor industry, one of its prime revenue sources, by curbing smuggling of cheap and spurious alcohol from across the borders and looking beyond excise duties.
The state government is pulling up its socks to collect more money from the liquor industry, one of its prime revenue sources, by curbing smuggling of cheap and spurious alcohol from across the borders and looking beyond excise duties.
Revenue minister Eknath Khadse, who also holds charge of the state excise department, said they were planning to set up a committee to come up with ways to plug loopholes and introduce new practices.
"We are looking at how the leakages can be reduced. Neighbouring states like Goa, Diu, Madhya Pradesh provide stiff competition as they have lower excise duty and the liquor available in Maharashtra is costlier than others. This leads to it being smuggled into the state. In the name of cheap liquor, spurious brews are also brought in," said Khadse, while speaking during his visit to the dna office on Wednesday.
The minister revealed that some manufacturers were misusing permissions obtained from the state excise and the Centre to produce drugs, and added that the committee would also look into this and impose restrictions.
In 2013-14, Maharashtra generated Rs 10,537 crore through the liquor industry. By contrast, Karnataka netted Rs 12,828.32 crore for the same period. While the revenue target for this year has been set at Rs 11,500 crore, Khadse said they plan to introduce some changes which will translate into an additional income of about Rs 2,000 to Rs 2,500 crore a year. He, however, expressed his inability to reveal more since the budget session of the legislature is underway.
As regards taking the auction route for manufacturing, wholesale and retail licences on the lines of practices adopted by states like Madhya Pradesh, Haryana, Uttar Pradesh, Khadse admitted that they were in two minds. He added that the cabinet had approved appointment of a consultant to evaluate this model.
According to senior excise officials, the auction route for licences given by the excise department regarding IMFL, beer, country liquor and wine would yield thousands of crores in the first year alone and break monopolies in the sector. Currently, the state earns a paltry Rs 500 crore annually as licence fees.
The state has nearly 23,000 state excise licences, including 1,700 for wine shops. Due to opposition from pro-prohibition activists, no new wine shop licences have been issued since 1973.
Maharashtra follows a policy of discouraging liquor consumption through high prices and low sales and has one of the highest excise duty regimes in India. However, repeated increase in excise duty and licence fees have led to excise revenues reaching saturation levels. This has necessitated the need to tap alternative sources.
Incidentally, Khadse, as the excise minister during the previous Shiv Sena- BJP government, had introduced a taxation system linked with cost of manufacturing, by replacing the earlier one which levied it at a specific rate (leading to the same tax rate for expensive and cheap liquor). This had met with opposition, but led to a spike in revenues by nearly Rs 700 crore at the first go.
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