To meet tax target, excise officials dump more liquor on bars

Eyeing Rs 6000 crore revenue before end of the fiscal, the excise department is forcing restaurants and liquor vends to buy more Indian-Made Foreign Liquor (IMFL).

Officials are setting purchase targets for the outlets to collect the corresponding tax amount to up their revenues that flagged due to a drop in demand.

Restaurants and bars refusing to abide by the targets are threatened with cases for improper maintenance of registry, keeping their business open beyond the stipulated night hour or for other erroneous reasons.

Beer supply to the outlets is also ruthlessly slashed if their purchase of hard liquor is less since the tax on beer is much less compared to hard drinks.

Excise, the second biggest money-spinner for the state, has earned Rs 11,953 crore till December 8, nearly Rs 800 crore more than the Rs 11,144 crore in the same period last year.

What makes officials push the envelope further is the Rs 18,050 crore target set for the department.

"It's picking up slightly," confirmed Excise Commissioner Manjunath Naik M. "We expected more revenue, but ban of liquor sales on highways (by the Supreme Court) and awareness programmes triggered a drop in consumption."

He also clarified that targets for liquor vends and restaurants will be based on their consumption patterns and is largely based on suspicions that bars source non-duty liquor and produce a cocktail to earn higher profits. "We consider these factors while setting targets," Naik said.

A bar and restaurant owner in Yelahanka, however, said officials force him to take 100 litres more than the 300 litre-per-month consumption level of his outlet. "If I refuse, they come up with false cases," he said. "It's not our fault that customers are not drinking."

Despite the huge demand for beer, they are supplied less since they don't contribute much to the tax revenue. "We get 20 cases of beer if we take 100 litres of hard liquor. Otherwise, officials will not supply beer," said a restaurant owner.

ISN Prasad, Additional Chief Secretary at the Finance Department, admitted that ban of liquor sale on highways triggered a drop in revenue.

"We will see if we can catch up with the shortfall," he said. "We obviously cannot push things beyond a point since bulk of the taxed revenue comes from the poor."

He assured Deccan Herald that he would direct excise officials not to set targets and force the outlets to buy more in order to collect more tax.

Naik, however, said the excise department has collected Rs 24 crore penalty from the bars that failed to purchase 468 liters or 52 cases of IMFL between 2004 and 2014.

Highlights:

*Excise achieved Rs 11,953 crore till December 8, Rs 800 crore higher than Rs 11,144 crore revenue recorded last year

*Rs 18,050 crore is set as target for this fiscal

*Revenues fell for the first three months due to liquor ban on highways

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