Bringing cheers amongst the Bacchus lovers, liquor contractors, and the hospitality industry, the Punjab Cabinet on Monday approved the state’s Excise Policy for 2021-22 with no increase in tax rates and prices for the consumer, reduction in annual license fee for hotels and marriage palaces — estimating 20 per cent increase in the state excise revenue.
The Punjab Excise Policy 2021-22, approved by the Cabinet led by Chief Minister Capt Amarinder Singh, projected a target to mop up Rs 7,002 crores through excise revenues as against the current year’s revenue of Rs 5,794 crore, showing an increase of 20 percent.
Sharing details, the State Finance Minister Manpreet Badal said that the Excise policy has been formulated specially to give relief to those sections of the society which were affected negatively due to Covid-19.
“The annual fixed license fee for bars in hotels and restaurants has been slashed by around 30 per cent, and the fee on consumption of liquor (assessed fee) has also been reduced. Besides, the annual licence fee for marriage palaces has also been reduced by 20 percent,” he said while addressing the media.
The relief is expected to go a long way in supporting the badly affected hospitality sector during the COVID phase.
Overall, the Excise policy has been largely focused on providing relief to retail licensees and to keep buoyancy in liquor trade, said the spokesperson of the Chief Minister’s Office, adding that the policy aimed at renewal of existing vends, subject to lifting of additional liquor by the licensees, ensuring a minimum growth of revenue of 12 percent during 2020-21.
Spokesperson said that the revenue of current year is expected to Rs 5,794 crore as against Rs 5,027 crore of previous year, showing an increase of 15 per cent.The State Govt is banking on the superb performance of the Excise Department during 2020-21 despite COVID-19 disruptions, which is now slated to garner around Rs 300 crores over and above the budgeted target of Rs 5578 crores, said the spokesperson. “If successful, the Government would be able to jump from Rs 5,073 crores in 2019-20 to Rs 7,000 crores in 2021-22, an increase of whopping 40 percent in two years,” added the spokesperson.
The Department proposes to collect the additional revenue by increasing the quota (minimum quantity to be sold by a licensee) of Punjab Medium Liquor by 12 percent, Indian made Foreign Liquor ( IMFL) by six percent, and Beer by four percent over last year respectively.
In a first, the Department has proposed to impose a quota for foreign liquor in Municipal Corporation areas and ‘A’ Class municipalities.
The policy also allows renewal of existing vends subject to lifting of additional liquor by the licensees — a move likely to bring stability in liquor trade and is also expected to generate additional revenue for the state exchequer.
Spokesperson said that the Government has not increased incidence of taxes on country liquor thereby maintaining the last year liquor prices for the consumers, which would help sale of legal liquor. Besides, the move would also help the Excise Department to combat sale of cheap illicit liquor which is hazardous to life and health of consumers.
There would be no increase in sale price of liquor, added the spokesperson.
In view of success achieved through ‘Operation Red Rose’, the Department has resolved to continue the enforcement activities under the operation with full vigour. The Department proposes to introduce more technology in tracking the manufacture, movement and stocking of liquor in the State.
The wholesale trade of liquor would be monitored online by the Government replacing the present L-13 wholesale licensees. The conversion quota has been increased from 15 to 20 percent. The fix and open quota percentage has been kept at 30:70 as existing.
The State Government has also decided to place a moratorium on setting up of new distilleries, breweries or bottling plant. It has also decided no new Letter of Intent (LoIs) will be issued for establishing manufacturing units in the current year. The Government has also made it mandatory for the LoIs issued for setting up of a Bottling Plant to complete their project by March 31, 2023.
To maximize the revenue, a minimum guaranteed quota for imported foreign liquor has been introduced in Municipal Corporations, A-Class Municipal Committees etc. The L-1 (Import)/L-1BB licensees shall have to procure IFL from the custom bonded warehouses situated in Punjab only.
To encourage ethanol manufacturers and proper utilization of agriculture produce, a new license (E-2) has been introduced for setting up an ethanol based distillation plant with a nominal fee.
The border areas of the State of Punjab have been given relief by converting 25 percent of the Fixed License Fee (FLF) to Additional Fixed License Fee (AFLF).