The Delhi government took a decision to do away with the fee set at 70% of MRP of every alcohol brand, in a meeting on Saturday. The decision was taken at a Cabinet meeting chaired by Chief Minister Arvind Kejriwal The fee was imposed on May 5 and till June 6, the government earned around Rs 209 crore through the same. As a result, the price of liquor is expected to slope down from June 10 with the withdrawal of the special corona fee imposed on alcohol brands.
However, at the same time, plan is to increase the VAT to 25% from 20% levied on all categories of liquor sold in Delhi NCR.
This decision was taken based on the inputs of the Excise Department. The Department suggested that retaining the high level of tax can lead to smuggling of liquor from Haryana or Uttar Pradesh, which would on the contrary lead to losses to the exchequer.
Liquor is among the largest sources of revenue in Delhi. In the annual budget for 2020-21, the government had projected a revenue of Rs 6,279 crore — 14% of total revenue projections — from state excise.
“Between May 4 — when liquor shops started opening — and June 6, liquor worth Rs 304 crore was sold. The corona fee came into effect on May 5. So, excluding the May 4 sales, the total amount raked in as corona fee comes to around Rs 209.3 crore,” said a senior excise department official.