Representational photo: Getty ImagesThiruvananthapuram: The Kerala State Beverages Corporation (Bevco) has decided to sell imported liquor brands through its outlets even as the state government raised taxes on domestic brands including beer. The state-owned monopoly alcohol retailer opened the doors to foreign booze after it noticed that illegal trade in imported liquor was thriving in the state.
The Kerala government is likely to keep taxes on imported liquor comparatively low because they are already subject to 150 per cent customs duty. Imported liquor will be taxed at 78 per cent and imported wine at 25 per cent.
The base price on imported liquor, excluding customs duty, will be fixed at Rs 6,000 per case to prevent the brands from undercutting the local counterparts. A case of imported wine will have a base price of Rs 3,000.
Connoisseurs will have to wait though. The decision is not likely to be implemented anytime sooner because the government has to amend the rules and set up the necessary infrastructure before ushering in the foreign brands.
Sales tax on Indian made foreign liquor brands that sell for up to Rs 400 will go up. Tax on such brands will be increased to 200 percent from 125 percent. Sales on pricier brands will go up to 210 per cent from 135 percent. Sales tax on beer will be increased to 100 percent from 70 per cent.
Bevco officials said the increase is unlikely to make a major difference in MRP.
The government has scrapped the surcharge and various cess imposed on alcohol sales and decided to reform the sales tax structure suitably. The government had painted itself into a corner by collecting cess on alcohol sales for various purposes including social security, heatlhcare and rehabilitation of employees in the liquor business.
The government had earlier imposed a 5 per cent cess to rehabilitate the workers who found themselves in the streets after the sudden closure of a number of bars in the state. Some of them had gone to court alleging that the money never reached them.
Stung by criticism from the court, the government has decided to seek other ways of generating revenue.
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