The standoff between liquor and beer suppliers and the State Government over the new excise policy announced by the Government is unlikely to end soon even as the Odisha High Court on Thursday passed an interim order while adjudicating over a batch of petitions filed by some liquor suppliers. The beverage suppliers have challenged the excise policy contesting the reduction of the offer prices (10 per cent reduction for IMFl/FMFl/wine and 20 per cent reduction for beer suppliers) and additional rounding off of the price to next Rs 5, which shall be part of the maximum retail price of the products.
A Division Bench comprising Justices Indrajit Mohanty and Biswanath Rath after marathon hearings for last three days directed the Government to convene a Price Fixation Committee (PFC) meeting of the Government-run Odisha State Beverages Corporation (OSBC) for reconsideration of the decision on the offer price. The offer price is the rate at which the suppliers offer to sell their IMFl, FMFl and beer products to the OSBC that includes expenses of the suppliers towards package, freight, insurance, bottling fee and taxes, if any other than the excise duty, import tax and entry tax upon approval by the PFC of the corporation.
The High Court also asked the suppliers to resume supply of their products at the newly-fixed offer prices after signing an agreement with the corporation which shall be subjected to the disposal of the pending writ petitions. The court adjourned the hearing to July 16. The companies in their petitions have maintained that the new excise policy aims at introducing ad valorem tax and mandates reduction of offer prices which are ultra vires. These steps substantially would impact the pricing of various alcoholic beverages to the detriment of the financial interest of the petitioners.
The petitioners have also objected to the rounding off of the prices to next Rs5 and adding that to the MRP of the product. “This provision is arbitrary and unjust in as much as in addition to excise duty and amounts to multiple taxation that would have a direct bearing on the marketability, competitiveness and margin of the business,” the petitioners said.