It is bad news for tipplers in Andhra Pradesh. The State government issued a gazette increasing the rate of tax on liquor in Andhra Pradesh. The rate of tax (VAT) on Indian Made Foreign Liquor (other than beer, wine and ready to drink varieties) with a basic price of up to Rs. 400 will be 50 per cent at the point of first sale.
For the liquor with the base price between Rs 400 and Rs 2,500 per case, the rate of tax is fixed at 60 per cent, and 55 per cent for those priced between Rs 2,500 and Rs 3,500 per case. For the liquor priced between Rs 3,500 and Rs 5,000, the tax rate is 50 per cent, and 45 per cent if the price is Rs 5,000 or more.
When it comes to beer bottled/packed in India, the tax is 50 per cent if the base price per case is less than Rs 200, and 60 per cent if it is over Rs 200. For wine and ready to drink varieties, the tax rate is fixed at 35%.
The government maintains that the hike in taxes is to discourage liquor consumption and to reach the goal of total prohibition by 2024 as promised. Interestingly, liquor sales have not come down in the State despite such severe hikes in the past.
Meanwhile, liquor sales this year too have recorded a 60 percent rise in terms of revenues and more than 100 percent in terms of volume, compared to the corresponding period last year. The YSRCP government has reduced the number of outlets in the State by downsizing them by 33 percent in two phases.
Looks like, this is going to be a huge burden on tipplers but will bring in more revenue to the state’s empty coffers!