Alcoholic liquor, which is served in bars and restaurants in Tamil Nadu, will be taxed at 14.5 per cent. The new measure is expected to bring in additional revenues of around Rs 150 crore to the state exchequer.
In his 2012-13 Budget speech, state finance minister O Panneerselvam said, "To implement welfare and developmental programmes more vigorously in the state, additional resources are required. Hence, it has been decided to take up a few measures for further mobilisation of revenues, and one among these is increasing the tax on alcoholic liquor."
Liquor of all kinds for human consumption, which are purchased, procured and brought from outside the state, and other than foreign liquor falling under Item-3 of the second schedule of the TNVAT Act, will be taxed at the rate of 14.5 per cent at the second point of sale in the state.
Alcoholic liquor of all kinds for human consumption, other than liquor falling under Item-1 and Item-3 of the second schedule, will be taxed at 14.5 per cent at the third point of sale (bars and restaurants), which are currently not under the tax net, said state principal secretary (finance) K Shanmugam.
At present, liquor manufactured in the state is taxed at 58 per cent, which is the first point. At the second point of sales, the Tamil Nadu State Marketing Corporation (Tasmac), a state government-run unit that controls the supply of liquor, it is taxed at 38 per cent. If the liquor is sourced outside the state, 58 per cent tax is levied at Tasmac, which is then the first point of sales.
“So far, the last point (bars and restaurants) was not under the tax net. Now, we have decided to levy on them also, since people who are coming there are rich and they can afford it,” Shanmugam said.
In 2011, Indian made foreign liquor (IMFL) and beer sales touched Rs 1397.46 crore.
Meanwhile, a senior representative from the industry said that the government was trying to make Tasmac as the only source for the products. At present, three-fourth of the products is being sourced from Tasmac, which is already facing a supply demand mismatch as the demand is high while the supply is less. “Will Tasmac be able to supply the products, especially specific brands, is the question.”
Currently, Tasmac buys 12 beer brands from four major breweries – Chennai Breweries (three brands); Empee Breweries (three brands); Mohan Breweries (four brands) and SNJ Breweries (two brands), according to reports.
Last year, Tasmac sold close to 3.2 million cases (on an average) a month during the peak summer months of April, May and June. This year, it is learnt that Tasmac ordered for 3.5 million cases for the month of March alone.
This, at an average price of Rs 80 a bottle, translates into Rs 336 crore. Overall, Tasmac hopes to sell beer worth over Rs 1,400 crore in the next four months, according to reports.