Covid period tax on liquor may be withdrawn, more bars opening in Kerala

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The Taxes department is considering the proposal given by Kerala State Beverages Corporation to withdraw the tax imposed on liquor during the COVID-19 period.

The corporation had given the proposal about a month ago. If the government accepts the proposal to withdraw the tax, the prices of liquor will come down by Rs 30 to Rs 100. The move to reduce the price of liquor is being planned with the expectation that such a decision might help the government in the coming assembly polls.

The excise duty on liquor was increased by 35 per cent in May to overcome the financial crisis faced by the state government. The excise duty which was 212 per cent had gone up to 247 per cent. The liquor manufacturing companies had demanded increase in prices commensurate with the hike in cost of raw materials required for liquor manufacturing. With the government accepting their demand, the prices increased again.

Since February 1, there has been an increase of 7 per cent in basic rates. With this the price of liquor increased from Rs 10 to Rs 90 per bottle.

New Bars

Kerala had just 30 bars during the fag end of previous UDF government and now when the incumbent LDF government gets ready to demit office the number of bars is nearing 1,000.

Even though the Left government had declared phased prohibition as its policy, majority of the bars which were either shut down or converted into beer/wine parlours have been given back their bar licenses (FL-3). With 17 new bars and 9 clubs given (FL 4) licences during the current financial year, the number of bars in the state has risen to 624.

The government decision is to change the status of the remaining 319 wine/beer parlours to bars once they raise their standard to three star facility.

Besides, the government had sanctioned about 100 new bars during the last five years.

Majority of the bars were shut down during Oommen Chandy government's tenure due to political differences in the UDF. The policy at that time was to grant bar license only to hotels which had a minimum 5 star facility. With this the number of bars in the state had reduced to 30 and 815 bars became beer/wine parlours.

The liquor policy was changed again after the LDF government came to power. The government decided to give back bar licences to hotels with minimum 3 star facility. Excise deputy commissioner was given the powers at the district level to grant FL-3 license to bars which had either been shut down or converted into wine/beer parlours, on attaining three star facilities.

With this decision the number of bars rose from 30 to 624.

The process of renewal of bar licences is continuing without any break even now.

The Cabinet meeting which took place two weeks ago decided not to make any changes in the existing abkari policy. Anyone who attains three star standards would be given FL-3 license. Excise deputy commissioner can take a decision on granting such licences without having any consultation or discussions at the government level or at the level of Excise Commissioner.

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