Liquor makers urge West Bengal govt to reduce 30% sales tax

With the steep fall in sale of liquor in West Bengal due to imposition of high sales tax due to coronavirus pandemic, the Confederation of Indian Alcoholic Beverage Companies (CIABC) has urged the State Government to bring down the levy to a reasonable level which will help state government earn more revenue and also sustain the industry.

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In its letter to the West Bengal Government, CIABC, the apex body of the Indian Alcoholic Beverage Industry, has stated that increase in sales tax on liquor by 30 per cent on April 9 has led to drastic fall in sales of liquor which has resulted in lower collections for state exchequer. It, therefore, has urged the State Government to reduce the increase in Sales Tax on liquor to a level not more than 5-10 per cent.

Giving data how liquor sales has fallen down since the hike in sales tax was imposed, CIABC Director General Vinod Giri said in April sales fell down by 84 per cent and in May by 35 per cent.

Giving examples of other states, Giri said: “In Delhi imposition of high coronavirus taxes had severely brought down liquor sales and thus, Government tax revenues also dipped, while in Haryana and UP, which imposed moderate tax increases, had managed to contain the decline and were net gainers. Delhi has subsequently withdrawn 70 per cent tax and replaced with a reasonable 5 per cent increase in VAT.”

Giri also stated West Bengal has a long and porous border with other states and the price increase in bordering states on account of Covid-19 has been much less. As a result, the difference in prices is now too wide and we apprehend that this will lead to large scale unlawful smuggling of liquor, thus, further affecting the genuine sales in the state and Government revenue, he added.