With the Goods and Services Tax (GST) set to be levied on the excise fees, the State Government is now working out strategies to meet the loss.
GST has been levied on all the fees collected from different sources like IMFl, beer, country liquor, mahua, bhang and other items. It is estimated that at least 27 per cent of excise revenue will attract GST.
As an example, out of Rs 2,929-crore excise revenue collected in 2016-17, Rs 773 crore collected as fees would have attracted GST, which accounts for Rs 139.11 crore.
The fees such as retail license fee, bottling fee, pass fee, application fee, manufacturing license fee, wholesale license fee would now attract GST.
There would be an impact on entire supply chain of excise products, and the retailer will be impact the most.
In order to avoid such impact, the Telangana Government has brought out major changes in the nomenclature of some of the terms like “fees”. It has promulgated an ordinance to amend the Telengana Excise Act, 1968.
Accordingly all “fees” would be termed as “tax”. This was done keeping in view that the Union Government cannot impose any tax over the taxes already levied by the State.
So license fees collected from bars, liquor outlets and others are now termed as “excise tax” in Telangana to avoid GST.
Now, the Odisha Government is studying the matter with all seriousness and is likely to follow the Telangana Government, pointed out an expert on the GST.
While excise duty does not attract GST, the officials are mulling to convert “fees” into “duty”. But nothing concrete has come out of the several rounds of discussions, said an official.
legal experts are advising to re-classify existing levies as tax or duty under the law.The Excise Department would take a final call on the matter. Some changed might be effected in the State Policy of Excise.
Notably, the State Government has targeted to collect Rs 3,600 crore to during the current financial year, 2017-18.
Sources said Rs 720 crore has been collected in the first quarter and officials are optimistic that Rs 900 crore would be collected in the second quarter.