Delhi Government removes corona tax of liquor, prices to return to normal

Guwahati: The Aam Aadmi Party (AAP) Government led by Arvind Kejriwal has revoked the additional surcharge on liquor prices that was brought into effect during the coronavirus-triggered lockdown.

When the shutters of the nation's liquor stores were reopened for business after an elongated period of closure owing to the coronavirus-triggered lockdown, huge crowds could be seen queuing up outside stores and this mad-rush went on for days on end. Seeing an opportunity to resuscitate an ailing economy, the Delhi Government, like many others, imposed a 70% corona fee on the MRP of different types of liquor. 

The move paid off as by the end of May, the excise department had witnessed total sales of Rs 234 crore. Now, however, with the Government shifting its focus towards the lifting of restrictions imposed during the corona lull, the Kejriwal-led Government has finally decided to withdraw the corona fee from alcoholic beverages.

The order, that came into effect from June 10 onwards, has come after the Arvind Kejriwal-led Government had earned around 110 crores from this tax.

Considering past trends, alcohol consumption in India amounted to about 5.4 billion liters in 2016 which reached about 6.5 billion liters by 2020. This steady increase in consumption of these beverages can be directly attributed to multiple factors including the rising levels of disposable income in people and a surge in population in the urban areas.

Amid the lockdown, liquor emerged as a major source of revenue for the Governments and in FY20, the Indian states earned a total of Rs. 1.75 lakh crore from excise and liquor accounted for 10-12% of the overall revenue earned. Interestingly, more than 50% of the retail price goes to the state and central governments in the form of VAT and excise duty.

Because liquor sales are so lucrative for the Governments, all the states (except Bihar and Gujarat which have enforced prohibitory laws) and Union Territories had been seeking to re-open the shutters of closed down liquor shops amid massive damage to the economy due to the lockdown.

ALSO WATCH: Three Universities in Assam to enroll Higher Secondary students