The Odisha government has decided to reduce the “special Covid fee” on liquor from 50 per cent on the retail price to 15 per cent in order to stem the fall in revenue collection. The reduced price came into effect from Friday.
Sources said the government was forced to take the step as liquor sales had nose-dived compared to 2019-20 in wake of the imposition of the 50 per cent “special Covid fee” on the maximum retail price of alcoholic beverages in May.
State excise secretary S.K. Lohani told The Telegraph, “When the price falls, the sales tend to pick up. Last year, we had collected Rs 4,500 crore in revenue. But this year, Covid-19 has badly hit our revenue collection. With the reduction in price, we are hopeful of collecting more revenue.”
In a notification, the excise department said, “Now considering the MRP of liquor prevailing in other states and specifically in the neighbouring states and also to ensure that no non-duty paid liquor from outside the state enters Odisha due to price differential, (the) government has decided to revise the MRP of these alcoholic beverages sold in the state by rationalising the rate of Special Covid fee charged.”
“For this purpose a revision in Special Covid fee is being done in such a manner that the MRP of various foreign–made foreign liquor (FMFL), India-made foreign liquor (IMFL)/beer/wine/ready to drink (RTD) brands is hiked in the range of around 15 per cent over the prevailing MRP of 2019-20 for most of the products (instead of the present hike of 50 per cent) with effect from July 10, 2020,” it added.
Sources said the state government had set a target of Rs 6,000 crore in excise revenue collection this year.
“If we stick to the target, we need to collect Rs 500 crore every month. But the ground reality is different. Now the target is not feasible any more. We should consider ourselves lucky if we can reach last year’s revenue collection,” said a senior excise official.
A deserted flyover in Patna on Friday during the total lockdown imposed by the Bihar government to contain the spread of the coronavirus. PTI
Sources said the overall revenue collection of the state government had gone down by around 23 per cent in the first quarter of the financial year compared to the corresponding period last year. The revenue collection upto June was Rs 8,204 crore compared to Rs 10,645 crore in the same period last year.
As far as excise revenue during the last three months is concerned, after the imposition of the “special Covid” fee, the collection has been too less, according to officials. The state government has collected Rs 200 crore in Covid fee from the sale of liquor. “We have also suffered loss in terms of revenue as many people bought liquor from neighbouring states where the price was low,” an official said.
Secretary of Odisha Liquor Vendors’ Association, Pravat Das, said, “All kinds of income generation activities have shut down. Young people who used to consume liquor in bulk are confined to their homes due to the corona pandemic. At such a time, increase in liquor prices due to high special Covid fee has hit the sales further. We are hopeful sales will pick up with the reduction in the price of liquor.”
Das, however, had a poser for the government. “We lifted liquor bottles on Thursday morning by paying the 50 per cent Covid fee. Now the government in the evening said we need to sell it at a reduced price with Covid fee slashed to 15 per cent. Who is going to compensate us for the loss? If we insist on collecting the 50 percent special Covid fee a law and order problem might emerge at our shops,” he told this newspaper.
