New liquor policy aims to raise Rs 500 crore additional revenue

Hyderabad: Aiming at greater revenue, the Telangana State Government on Thursday announced the new Excise policy for a period of two years 2019-2021.

The government has dropped its proposal to take over the liquor shops but has decided to levy Rs 5 lakh special excise tax in addition to the licence fee.

Profit margin on beer has also been reduced to 20 per cent from 25 per cent and the non-refundable application fee has been increased to Rs 2 lakh from Rs 1 lakh.

In all, the government will earn nearly Rs 500 crore additionally under the new policy every year.

New liquor policy aims to raise `500 cr additional revenue

The new excise policy will come into effect from November 1. Under the new policy, the government will collect Rs 5 lakh as special tax from each licenced liquor shop every year.

It is for the first time that the special excise tax has been imposed on liquor outlets. Telangana Wine Dealers' Association leader D Venkateswara Rao said that liquor trade is a highly cost-intensive business with low-profit margins after imposing special tax.

Additional Rs 5 lakh will be collected from the 'Walk-In Liquor Outlets'. Around 200 liquor shops have the walk-in facility where consumers can visit the shop and pick liquor bottles of their choice.

Reducing profit margin on beer sales has also come as a big blow for liquor traders, the association leader said that traders are earning profits only from beer which registered the highest sales every year in Telangana. Traders will have to find other options to compensate the reduced profit margin.

State Special Chief Secretary to Excise and Prohibition Somesh Kumar, in an order, said that non-refundable application fee has been fixed at Rs 2 lakh as against Rs 1 lakh in the previous year.

Excise Officials said that the increase in licence fee will help in mopping up bigger revenues and meet the targets set by the government through liquor sales in the next two years.

The government is expecting Rs 15,000 crore revenue through liquor sales this year and Rs 16,000 crore in 2020-2021, a senior official said that the government dropped the proposal to take over liquor trade by the government and continue to encourage private traders in the liquor business.