Booze to cost more with excise tweak

Calcutta: Alcoholic drinks will cost more - at least by 10 per cent a bottle - as the Bengal government has decided to tweak the excise structure close on the heels of slashing dry days. "Last week, the state excise department issued a notification changing the excise duty for all alcoholic beverages in the state.... The hike in the prices of bottles, irrespective of size, would be at least 10 per cent and the impact will be more in the bars," said a liquor industry insider. The new rates - called excise duty multiplier - will come into effect from November 8. The exact impact on the prices, according to the source, will be known after the liquor companies change the labels on their bottles after getting them cleared from the state excise department. A government official said an upward revision had become necessary as the rates had remained unchanged since 2013. "Look at states like Karnataka, Kerala, Andhra Pradesh or Telangana. The excise duty there is not only high, the rates keep changing at regular intervals, almost during every state budget," the official added. Over the past few years, the actual excise collection in Bengal has lagged behind projections. This time finance minister Amit Mitra has projected excise earnings of Rs 4,698 crore, around Rs 200 crore more than a target he had set and missed. "This time, however, the target seems achievable as we have started following a liberal liquor policy," said the official. Ahead of the festive season, bars in three-star hotels and above and clubs were given permission to serve liquor on all the days of a year. The number of dry days for others was pruned to four-and-a-half days from 12. The decision has already reaped dividends, with excise collection in September 33 per cent more than that last year. "As any levy on liquor is perceived as a sin tax, there will not be any political fallout. That's why it has been approved," said a source. Since coming to power, chief minister Mamata Banerjee has avoided increasing taxes. But a source close to her said that getting her approval to raise the excise duty was not at all difficult as she considered it a sin tax - a government levy to discourage consumption of products such as alcohol and tobacco. "Besides, she realises that higher rates will result in higher revenues," said the source.