Maharashtra boasts of highest sale and consumption of liquor in the country, but records the lowest revenue collection due to administrative lapses and wrong policy decisions.
Maharashtra boasts of highest sale and consumption of liquor in the country, but records the lowest revenue collection due to administrative lapses and wrong policy decisions.
While agreeing to undertake policy corrections, the finance ministry clarified that it does not plan to increase the cost of beer, wine or foreign-made liquor.
“Almost 40% of the 1.25 crore population in Maharashtra consumes some form of the liquor. Therefore, earnings from excise duty and sales tax should also be higher,” said a source in the finance ministry.
The total tax receipts for (2009-10) was Rs59,106 crore, of which the excise duty was Rs5,056 crore and sales tax Rs1,795 crore.
The total of excise duty and sales tax from liquor accounts for Rs6,851 crore. Around 480 lakh cases of Indian Made Foreign Liquor (IMFL) and 310 lakh cases of beer were sold in that year.
The Comptroller and Auditor General (CAG) report observed: “The revenue from state excise duty was lowest in Maharashtra, though liquor consumption was the highest when compared with other states such as Andhra Pradesh, Tamil Nadu and Karnataka. Maharashtra’s excise revenue collection was the lowest compared to these states.”
The report found that Andhra Pradesh, Karnataka and Tamil Nadu had benefitted by canalising the entire supply of IMFL/beer, either domestically manufactured or received from other states, by setting up state beverage corporations to sell the products. Maharashtra has no such corporation.
The report said Article 47 of the Constitution ordains states to levy higher tax on liquor to discourage its consumption and mobilise more revenue. But Maharashtra did not follow the order. The shortcomings pointed in the CAG report for low revenue receipts include shortfall in inspections, shortage of staff and ineffective flying squads for state excise-related offences.
The report said the ban on issuing licences for retail trade of IMFL and country liquor since 1973-74 appears unjustified. While clubs, bars and shops were allowed to increase sales, the government could not recover the revenue through new licences.
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