Excise sets the bar high for revenue collection

More-than-expected revenue collection from the Excise department in the first four months of the financial year has brought cheers to the state government.

The Kumaraswamy government, which is facing a fund crunch for implementing some of its budgetary programmes, is hoping to fetch handsome revenue from the Excise department in the coming days – much more than the budget estimation.

The Excise revenue has witnessed an impressive 12% growth between April and July (highest in the recent past), raking in Rs 883 crore more than the collection during the same period last year. The department has collected Rs 6,541 crore during this period – 33.1% of the total budgetary target of Rs 19,750 crore for the financial year.

Consumption up

Liquor consumption too has gone up during this period. As many as 184.63 lakh boxes of liquor (each box containing 48 quarter bottles) have been sold between April and July against 172.46 lakh boxes during the same period last year.

The jump in revenue collection is mainly on account of 8% increase in additional excise duty on all brands of liquor, excluding the first slab (cheap liquor), that came into effect from April this year. It was announced by the previous Congress government in its budget presented in February. Subsequently, Kumaraswamy, who also holds the Finance portfolio, increased additional excise duty by another 4% in his budget presented in July this year. This hike is across all brands, including first slab, and it has come into effect from August.

“The revenue flow is expected to be much more from August. Additional resource mobilisation estimated in the budget from the hike in excise duty appears very modest. The government is now confident of getting much more,” official sources in the chief minister’s office said.

As per an estimation by the Finance department, the government may mop up an additional Rs 3,000 crore by the end of the year from excise revenue if the trend continues. The Rs 44,000-crore farm loan waiver scheme has virtually drained the state exchequer, leaving very little elbow room for the government to take up other development works. This apart, the government has decided to replace hologram-embedded excise adhesive labels (EALs) with QR code to prevent ‘seconds’ sale (illegal liquor sale without paying excise duty) and avoid tampering.

“A unique QR code will be assigned to every liquor bottle while packaging at the distilleries. The code will not only prevent ‘seconds’ sale, but also ensure quality for the customers. The customers can also easily verify whether a liquor bottle is genuine or not by using the QR code reader, which can be downloaded and installed on a smartphone for free,” the sources said.