Scrap VAT on liquor sold in clubs, star hotels: Jarkiholi

Excise Minister Satish Jarkiholi has said that his department has recommended to the Finance department to scrap imposition of 5.5 per cent value added tax (VAT) on liquor sold in clubs, star hotels and guesthouses.

Speaking to reporters in the Vidhana Soudha on Wednesday, Jarkiholi said levying of 5.5 pc VAT was creating problem for one section of the liquor merchants. Therefore, a request has been made to amend the law to remove VAT, he added.
 The minister said there was no VAT on liquor sold by shops having the CL-2 licence, while other places where liquor is sold attracts VAT. This is leading to price difference.

Liquor business has been affected in bars, restaurants, clubs in urban areas, guesthouses and star hotels. Hence, the Finance department has been asked to withdraw the tax clause, he said.

The laws followed by the Excise department are obsolete and they have been posing problems for running the department. The finance and law departments have been requested to simplify certain laws, the minister said.

Jarkiholi said many files pertaining to the Excise department had to come through the Revenue department. This has led to more work for deputy commissioners and is posing problems to the Excise department.

It is better to move the files through the joint commissioners of the Excise department and a recommendation to this effect has been made to the government, the minister said. The process of transferring licences of liquor shops would be simplified. If licences are transferred among relatives, the fee will have to be paid only once, he added.
 The Finance department has agreed to fill up all vacant posts in the Excise department in the next three years, he said.

The process of filling up vacancies for 550 jobs at different levels is in the final stages. Due permission has been taken to fill up 11 posts of Excise deputy superintendents, 440 sub-inspectors, 1,353 guards and 292 drivers. There is no proposal before the government to allow opening of new liquor shops and to sell cheap liquor.

The revenue target fixed for the year is Rs 14,400 crore and the same would be achieved. Jarkiholi said that he was also backing the demand for reservation for SC/STs in proportion to their population, while giving liquor licences. The Assembly committee on SC/STs has recommended reservation for SC/STs in liquor licence distribution. There is reservation in various departments.