4% jump in excise duty on IML to fund loan waiver

The state government has announced a 4% hike in excise duty on Indian Made Liquor (IML) to mobilise resources to fund the farm loan waiver.

Presenting the Congress-JD(S) coalition government’s maiden budget on Thursday, Chief Minister H D Kumaraswamy said, “A revenue target of Rs 18,750 crore was fixed for the Excise Department for the year 2018-19. At the end of June this year, Rs 4,674 crore has been collected.”

“I propose to increase the existing rates of additional excise duty on IML by 4% in all 18 slabs as per Annexure-1,” he added. Now, a carton of IML can cost up to Rs 130 more than what it was.

The government plans a revised target of Rs.19,750 crores fixed for the financial year 2018-19. In the earlier budget presented by former Chief Minister Siddaramaiah on February 16, the government had fixed a target of Rs 18,750 crore.

Reactions

P L Venkatarama Reddy, president of Karnataka Wine Producers’ Association, said, “Hiking excise duty on IML by 4% will decrease the sales of liquor in the state for at least six months. The price has been increased in a gap of five months.”

B Govindaraj Hegde of the Federation of Wine
Merchants’ Association, Karnataka, said, “Increasing the price of IML may lead to the production of substandard liquor. This will also create a negative environment in the business. The excise duty on IML is overtaxing the commodity to reach the revenue target Hiking.”