Coronavirus lockdown: Alcohol companies request Delhi govt to reduce 70% cess on liquor

The Confederation of Indian Alcoholic Beverage Companies (CIABC) has written to Delhi Chief Minister Arvind Kejriwal demanding a reduction of 70% coronavirus pandemic-tax on alcoholic beverages to a “realistic and sustainable level”.

“Despite initial surge, the sale of liquor has fallen drastically in Delhi by 58% in the month of May over same period last year. Whereas sales in neighbouring states seems to be bouncing back in sharp contrast to Delhi. It may be noted that both UP and Haryana have effected a tax increase of not more than 10-15%,” CIABC said in its letter to CM Kejriwal.

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Pointing out that the sale of liquor has fallen drastically in Delhi by 58% during the month of May, whereas in neighbouring states it had gone up, CIABC Director General Vinod Giri said.

He said, “After the imposition of the Corona cess we had met Delhi Deputy Chief Minister Manish Sisodia and highlighted that 70% Corona pandemic tax on liquor would prove to be counterproductive if imposed for a long time as it would lead to a fall in sales and hence government revenues…Our worst fears have come true.”

Since borders of Delhi are porous, the price difference between Delhi and neighbouring states is too high, with 70% cess, and once the supply lines in neighbouring states fills up, one may apprehend a large scale smuggling to Delhi, Giri said in his letter.

“We once again request you to bring the 70% cess on alcoholic beverages down to a realistic and sustainable level. It is evident that such a move will benefit of all lawful stakeholders in the industry, i.e., the Government, companies, trade, and consumers.” he said in the letter.