Karnataka: Pandemic impacts on Excise revenue

Bengaluru: The pandemic Covid-19 became a major obstacle in the Excise revenue to the State economy. It has registered over 33% negative growth between April and June in 2020 when compared to the corresponding period in 2019. As per records, revenue collected by the Excise department in the first quarter of the financial year 2020-21 is Rs 3,846.76 Cr as against Rs 5,760.14 Cr for the same period in 2019-20. It has marked a drop of Rs 1,913.38 Cr this year as compared to last year.

Speaking on the issue, an official said, "There is a 33.22% negative growth between April and June. No revenue was generated in April because of the complete lockdown. The government had suffered with a loss of Rs 2,300 Cr due to the closure of liquor stores from March 23 to May 4 during Lockdown 0.1."

The sale of Indian Made Liquor (IML) has also collapsed by 33.88 per cent in Karnataka as compared to the last three months. The IML sales in the first quarter this year were 100.76 lakh cases where as 152.38 lakh cases were sold in the last year. Retail liquor stores (CL2) and MSIL stores were allowed to open from May 4 but the government increased the Additional Excise Duty (AED) on May 7 on all the 18 slabs of IML from 17% to 21% and 25% over and above the 6 per cent AED, which was increased with effect from April 1.

Speaking on the occasion, an excise licensee said, "The unparalleled increase in liquor prices was to generate additional revenue of Rs 2,500 Cr in the current economy but it totally affected the sale and consumption of IML considerably."

Speaking on the occassion, senior excise officer said, "Revenue collection in the first quarter of this year may be better than other departments such as Commercial Taxes, Stamps and Registration, which are the major contributors to the State economy. Excise department generates the second biggest revenue to the state government."