Delhi excise panel reviews tax rates, MRPs of liquor to boost revenue

The issues of unchanged excise tax rates and maximum retail prices (MRP) of liquor in Delhi were discussed in a meeting of the PWD minister Parvesh Verma-led committee on Friday, sources said.

The committee is tasked with preparing the draft of a new excise policy.

Delhi loses revenue to NCR cities, including Ghaziabad and Nodia (in UP) and Faridabad and Gurugram (in Haryana), due to lower excise tax rate and MRPs, sources said.

"The excise tax rate in Delhi has not been revised since 2014, and the MRP was last updated three years ago. A revision in these two will help to tap the full potential of the retail liquor trade in Delhi and generate more revenue for the government," an official source said.

Chief Minister Rekha Gupta earlier said that her government was working to form a new "transparent, socially responsible" excise policy that would also help in generating more revenue for the government.

Sources said that the draft of the new excise policy is likely to be ready in a couple of months, after which it will be put in the public domain for feedback. The policy will be notified after approval by the Cabinet and the Delhi lieutenant governor.

Earlier, the committee, in its meetings, took feedback from stakeholders, including manufacturers and retailers, on excise revenue, retail margin per bottle, ease of doing business, legal drinking age and scope for private players, among other aspects.

The fixed margins per bottle in Delhi put all kinds of liquor in one segment, encouraging retail vendors to stock cheaper, less popular brands. This also encourages brand pushing and unavailability of more popular brands and high-end liquor, sources added.