Guwahati/Shillong/Itanagar, (Asian independent) After petrol and diesel, three governments in the northeastern states – Assam, Meghalaya and Arunachal Pradesh – have levied additional 25 per cent tax on alcohol to generate extra revenue, officials said.
Excise Department officials of the three states said that the 25 per cent duty was increased with immediate effect in order to generate additional revenue to meet the unexpected financial burden and expenditure arising out of the coronavirus lockdown.
An official in Guwahati said that the Assam government in its cabinet meeting on Friday approved the increase in the excise duty on Indian Made Foreign Liquor (IMFL) by 25 per cent. “The additional 25 per cent excise duty would generate an extra income of Rs 1,000 crore for the state to meet the unforeseen financial burden and expenditure arising out of the COVID-19 pandemic,” the official said.
Meghalaya government Excise Department official said in Shillong that with the increase in the duty on liquor, the government will get additional revenue to the tune of Rs 120 – Rs 130 crore. “In the last financial year (2019-20), the excise duty and VAT (Value Added Tax) collected in Meghalaya from the liquor sale was Rs 260 crore,” the official added.
In Itanagar, an official said that the Arunachal Pradesh government has levied a ‘cess’ of 25 per cent on the maximum retail price of all alcoholic beverages including IMFL, effective from Saturday midnight.
Several states including Delhi, Uttar Pradesh, Tamil Nadu and Andhra Pradesh have already raised the taxes on liquor to give boost to their revenue.
To generate additional revenues, the Assam, Meghalaya and Nagaland governments last month had already increased the prices of petrol and diesel by raising Value Added Tax and cess.
Assam’s Finance and Health Minister Himanta Biswa Sarma said in Guwahati that while GST (Goods and Services Tax) collection in Assam was Rs 932.36 crore in April 2019, the figure was just Rs 193 crore in April this year — a sharp drop of 80 per cent.
“Similarly, revenue collection from sale of liquor dropped from Rs 65 crore in March this year to just Rs 6.33 crore in April. Tax collection from sale of petroleum products dipped from an average of Rs 340 crore per month to just Rs 60 to 70 crore in April,” Sarma had told the media.