<p>High cess on liquor imposed by some states to increase their tax revenue was counterproductive as the sale of booze was down by half during relaxation in lockdown, according to industry body Confederation of Indian Alcoholic Beverage Companies (CIABC).</p>.<p><strong>Also Read: <a href="https://www.deccanherald.com/national/west/50-tipplers-in-west-bengal-switch-over-to-cheaper-brands-of-liquor-due-to-price-hike-survey-861540.html" target="_blank">Tipplers in West Bengal switch over to cheaper brands of liquor</a></strong><br /><br />CIABC, the apex industry association representing Indian liquor manufacturers, said that data collected by it revealed that the states, union territories which imposed no or moderate Covid-related taxes (0-15%) saw their sales falling by just 16% while those which levied over 50% taxes saw their sales dip by 59%.</p>.<p>Comparing May and June data, when liquor sale was opened up after six weeks of complete shutdown, CIABC categorized states into three categories based on the corona cess levied by various state governments.</p>.<p>The first group, which levied up to 15% Corona tax include Uttar Pradesh, Uttarakhand, Telangana, Karnataka, Chhattisgarh, Haryana, Tamil Nadu, Himachal Pradesh, Maharashtra, Assam, Chandigarh, Madhya Pradesh, Goa and Punjab.</p>.<p>The second group of states with 15-50% Corona tax comprise Arunachal Pradesh, Meghalaya, Rajasthan, West Bengal, Kerala and Jharkhand.</p>.<p>While the third group of states, UTs with above 50% Corona cess are Andhra Pradesh, Odisha, J&K, Pudducherry and Delhi (though some states like Delhi later reduced tax from 70% to 5%).<br /><br /><strong>Also Read: <a href="https://www.deccanherald.com/opinion/panorama/a-relook-into-alcohol-policy-850720.html" target="_blank">A relook into alcohol policy</a></strong></p>.<p>“Comparing data for the month of May and June vis-a-vis previous fiscal clearly shows the sale of alcohol in the first category of states fell by 16%, in the second by 34% and in the third by 59%. This, in effect, conveys that tax increases most likely did not lead to an increase in tax collection in absolute terms. This clearly indicates that levying of hefty Corona tax did not lead to an increase in total tax collection. In fact, the trend in sales recovery in June, when unlocking began, was stronger in states that imposed lower tax increases,” said CIABC Director General Vinod Gir in a statement.</p>.<p>"We believe that tax increases that push consumer price up by more than 10-15% are counterproductive and lead to a reduction in total tax collections despite higher tax rates,” Giri added.</p>
<p>High cess on liquor imposed by some states to increase their tax revenue was counterproductive as the sale of booze was down by half during relaxation in lockdown, according to industry body Confederation of Indian Alcoholic Beverage Companies (CIABC).</p>.<p><strong>Also Read: <a href="https://www.deccanherald.com/national/west/50-tipplers-in-west-bengal-switch-over-to-cheaper-brands-of-liquor-due-to-price-hike-survey-861540.html" target="_blank">Tipplers in West Bengal switch over to cheaper brands of liquor</a></strong><br /><br />CIABC, the apex industry association representing Indian liquor manufacturers, said that data collected by it revealed that the states, union territories which imposed no or moderate Covid-related taxes (0-15%) saw their sales falling by just 16% while those which levied over 50% taxes saw their sales dip by 59%.</p>.<p>Comparing May and June data, when liquor sale was opened up after six weeks of complete shutdown, CIABC categorized states into three categories based on the corona cess levied by various state governments.</p>.<p>The first group, which levied up to 15% Corona tax include Uttar Pradesh, Uttarakhand, Telangana, Karnataka, Chhattisgarh, Haryana, Tamil Nadu, Himachal Pradesh, Maharashtra, Assam, Chandigarh, Madhya Pradesh, Goa and Punjab.</p>.<p>The second group of states with 15-50% Corona tax comprise Arunachal Pradesh, Meghalaya, Rajasthan, West Bengal, Kerala and Jharkhand.</p>.<p>While the third group of states, UTs with above 50% Corona cess are Andhra Pradesh, Odisha, J&K, Pudducherry and Delhi (though some states like Delhi later reduced tax from 70% to 5%).<br /><br /><strong>Also Read: <a href="https://www.deccanherald.com/opinion/panorama/a-relook-into-alcohol-policy-850720.html" target="_blank">A relook into alcohol policy</a></strong></p>.<p>“Comparing data for the month of May and June vis-a-vis previous fiscal clearly shows the sale of alcohol in the first category of states fell by 16%, in the second by 34% and in the third by 59%. This, in effect, conveys that tax increases most likely did not lead to an increase in tax collection in absolute terms. This clearly indicates that levying of hefty Corona tax did not lead to an increase in total tax collection. In fact, the trend in sales recovery in June, when unlocking began, was stronger in states that imposed lower tax increases,” said CIABC Director General Vinod Gir in a statement.</p>.<p>"We believe that tax increases that push consumer price up by more than 10-15% are counterproductive and lead to a reduction in total tax collections despite higher tax rates,” Giri added.</p>
