Chief Minister V D Satheesan on Wednesday told the Kerala Assembly that the new tax rates proposed in his Budget for low-alcohol liquor brands would become operational only after the UDF gave its nod.

"Abkari policy is a political decision. It has to be taken collectively by the UDF," the Chief Minister said while replying to the Budget discussions in the Assembly. 

In his Budget, Satheesan had proposed two tax slabs for the new category called low-alcohol beverages. 120 per cent for drinks with 0.5% to 10% alcohol content, and 175 per cent for drinks with 10-20% alcohol content.

"A draft (liquor) policy will be drawn up, and all the UDF constituents will put forward their opinions. Only then will a decision be taken," the CM said, and added: "If the UDF eventually greenlights the sale of low-alcohol brands and includes the measure in the new liquor policy, then these will be the rates. If the UDF is against it, these brands will not be sold." 

He also addressed the charge that the Excise Department was kept in the dark about the tax proposal. "When a tax proposal is included in the Budget, it is not usual to hold discussions with concerned departments. All finance ministers know this," he said.

There was also the allegation that the files related to the low-alcohol tax rates had moved at 'bullet speed' through the corridors of Secretariat, suggesting a swift behind-the-curtain move. "In fact, when taxes are decided, files have to move at bullet speed," Satheesan said. "Taxes are decided a week before the Budget presentation. So files have to move quickly. These proposals were sent back to me by midnight and went for printing at 1 am on the day of the Budget presentation," the CM said.

The Chief Minister then employed facts, sarcasm and a bit of deception to attack the LDF on the low-alcohol issue. He seemed particularly worried by the Opposition charge that he had taken bribes from big liquor companies like Bacardi. "How much did you get is the question they keep asking," the CM said with scorn, and this was repeated multiple times during his one-and-a-half-hour speech.

Satheesan said that the sale of low-alcohol drinks was the LDF's baby. He said discussions with liquor majors had started right after the second Pinarayi Vijayan Ministry took over in 2021. He said that within six months of assuming office, the then excise minister M V Govindan had issued a note in which he directed officials to submit an urgent report after clearly defining the category of low-alcohol beverages on the basis of applications submitted by Bacardi India and SDF Industries. "So who was speaking with Bacardi?" the CM said.

Then, in a tone that people adopt to undermine and make fun of the statements made by others, Satheesan repeated the LDF charge: "If this low-alcohol liquor finds its way into the market, it will destroy Kerala's youth. The youth will be obliterated." 

He then drew attention to item 25 of the LDF's 2022-23 Abkari Policy. He read it out in the manner of a taunt. "The Udayabhanu Commission has recommended that low-alcohol drinks should be encouraged. Steps will be taken to make available liquor with alcohol content up to 20 per cent." "The very political front that drafted this Abkari Policy is now advising us on low-alcohol drinks," the CM said.

Further, Satheesan said that the previous LDF government had even amended the Foreign Liquor Rules to facilitate the sale of low-alcohol brands like Bacardi Breezer.

What's more, Satheesan said that companies like Bacardi had approached the LDF government seeking a low-alcohol tax rate that was between that of wine and beer. For wine, it is 86 per cent, and for beer, 116 per cent. "I am not saying that a low rate was announced, but all procedures required to fix a low tax rate were completed. It was only because elections were declared that the new tax rate was not made official," the CM said. Satheesan said the tax rates proposed in his Budget - 120% and 175% - were the highest for low-alcohol drinks in the country.

Former finance minister K N Balagopal objected, saying it was an unfair remark. "For three years we did not take a decision on the tax rate for low-alcohol liquor, realising the dangers it posed for Kerala," Balagopal said.

Satheesan then made a misleading observation. He said that in 2018-19, the then finance minister T M Thomas Isaac had fixed a tax rate of 78 per cent for Foreign Made Foreign Liquor (FMFL). Then, he said Indian Made Foreign Liquor (IMFL) was taxed at 210 per cent. "And in 2022-23, when IMFL was taxed 251 per cent, the FMFL rate was 115 per cent, lower than that of beer," he said, and delivered the sucker punch: "My question is, have you fixed a low rate (for FMFL) after taking money from Johnnie Walker and Chivas Regal?"

The problem with this argument is that Satheesan had conveniently ignored the fact that FMFL brands are imported and are already subjected to a high customs duty and other impositions like Agriculture Infrastructure and Development Cess.

Satheesan reserved his sharpest ridicule for the last. "Please don't encourage the spread of liquor. Liquor is poison," Satheesan said in a funny impersonation of the LDF's new stand on liquor sales. advice. "When the first Pinarayi government came to power, there were just 28 bars in Kerala. Now there are more than 900. Obviously, they were trying to prevent the spread of liquor," the CM said, his words dripping with sarcasm.