With the depleting income of the layman and draining resources of the country, India’s financial health has decreased since lockdown 1.0. To raise to a level, the government imposed a value-added tax on all fuels and excise on liquor sales. Since lockdown, 13 states have added VAT in fuels such as including Maharashtra, Tamil Nadu, Karnataka, Rajasthan and West Bengal. Price increases ranging from Rs. 1-6/litre for petrol (Rs 0.5-5/litre for diesel). On Tuesday, the rate of diesel in Delhi was Rs 69.39/litre, while petrol was sold in the city at Rs 71.26/litre.
Increases in alcohol excise/taxes have been announced by at least three states. As soon as the liquor shops in Delhi opened, due to heavy crowding, Delhi government levied new “special corona tax” of 70% on MRP on all liquors. Andhra Pradesh increased the tax from 25% to 50%. West Bengal imposed 30% tax. Rajasthan imposed a 15% tax. Uttar Pradesh has also excised duty on alcohol.
To boost revenues while enforcing social-distancing, the Chhattisgarh government has launched a web portal for home delivery of liquor in green zones of the state. The Maharashtra government collected Rs 11 crore in revenue on day one of liquor sale.
State excise duties on liquor are the second or third largest contributor to the category State’s Own Tax revenue. On an average, the states collected about Rs 12,500 crore per month from excise on liquor in 2018-19, which rose to about Rs 15,000 crore per month in 2019-20, and which was further expected to cross Rs 15,000 crore per month in the current financial year.