The money spinning liquor trade has hit a rough patch in State. Traders and businessmen engaged with the business are facing double whammy – the strain of coronavirus and lockdown has hit the purchasing power of people and secondly the government hiking the VAT on liquor by 25 per cent. The condition of liquor traders is as such that many of them are planning to surrender their license.
Arun Chawla a city based businessman and former booze trader said, “The liquor business is fighting its last battle in the State. Most of the businessmen, who are in the liquor trade are crying as they are not even able to even pay the license money. Many of them are planning to surrender their license.” Chawla said, “The Government without doing proper homework increased the license fees on liquor from Rs 65 lakh to 2.15 crore on yearly basis. Now, due to coronavirus strain and lockdown people’s purchasing power has come down affecting the sale.”
Chawla claimed the traders are worried as to how they will pay the license fees and forget about making profit. The trader claimed that the booze trade which was in oxygen got the last punch from the state government when the state government hiked VAT on booze by 25 per cent.
The resumption of sale of liquor in Jharkhand began from May 20. However, the Jharkhand government has increased the Value-Added Tax (VAT) on liquor to 75 per cent across the state.
The increase in VAT is applicable for all types of liquor including Indian-made Foreign Liquor (IMFL). The earlier rate of VAT on liquor in the state was 50 per cent.
Several other State Governments have also allowed liquor shops to reopen and sales to begin amid the extended lockdown. Some, including Delhi, Haryana, among others, had also imposed a special ‘Corona fee’ on the sale of liquor. A liquor trader requesting anonymity said, “The Jharkhand Government without doing proper home work decided to hike Vat on liquor by 25 per cent just on going by media reports that Southern states such as Tamil Nadu, Karnataka and Punjab governments have earned high through booze trade once liquor shops were reopened. But the State Government should understand that the purchasing power of the people of Jharkhand is much below than other states.”
The trader said, “The sale is low as most hotels, restaurants, bars, lounges are closed. There are restrictions on the number of people in a marriage ceremony. In such a situation the sale of liquor has come down.”
Sources said that the State Government had generated revenue of more than Rs 150 crores every month through the Excise Department before the lockdown. Now, it targets to generate more than Rs 300 crore every month but the current sales situation has raised very serious concerns for the Government in generating revenues.