TN plans excise duty hike on Indian-made foreign spirits

Seeks to enhance maximum rate of excise duty in respect of ordinary, medium and premium brands to Rs 250, Rs 300 and Rs 500 respectively per proof litre

The Tamil Nadu government has introduced a Bill seeking to hike the excise duty or countervailing duty leviable on Indian-made foreign spirits (IMF) to augment revenues.

The Bill, called the Tamilnadu Prohibition (Amendment) Act, 2014, was introduced by Minister for Electricity, Prohibition and Excise Natham R Viswanathan and it sought to enhance the maximum rate of excise duty in respect of ordinary, medium and premium brands to Rs 250, Rs 300 and Rs 500 respectively per proof litre.

The government has decided to bring in amendments to Sub-section (1) of Sec 18-B of Tamil Nadu Prohibition Act, 1937.

The Tamil Nadu State Marketing Corporation (Tasmac), a company owned by the state government, is a monopoly over wholesale and retail vending of alcoholic beverages in TN. Tasmac was established in 1983 by then chief minister MG Ramachandran for wholesale vending of alcohol in Tamil Nadu. In 2001, prohibition was lifted again and Tasmac became the wholesale monopoly for alcohol. For retail vending, the state auctioned off licences for running liquor shops and bar.

By 2004, all private outlets selling alcohol were either shut down or taken over by the company. This monopoly established by the AIADMK government of J Jayalalithaa came into effect from 2003. The DMK government, which took power in 2006, did not revise its predecessor's policy.

There are 6,800 Tasmac retail vending shops in the state. The provisional revenue from liquor sales through the Tasmac amounted to Rs 21,641 crore during 2013-14, as against Rs 21,680.67 crore in the previous year. Revenues during 2011-12 stood at Rs 18,081.16 crore, against Rs 14,965.42 crore in 2010-11.