Liquor Ban Might Be Lifted; Centre Gets Multiple Requests
New Delhi: Industry contributes over ₹2 lakh cr. in taxes: Confederation of Indian Alcoholic Beverage Companies (CIABC)
India has been placed under strict lockdown to break the chain of coronavirus from spreading. This has cost dearly to many – and businesses and economy aren’t the only ones bearing the brunt of the lockdown. Even the state tax revenue has taken a major hit as all non-essential businesses remain shut. The centre has imposed a strict ban on liquor, tobacco and gutka across India, which has affected state revenues across India.
Punjab CM Amrinder Singh has formally requested the Ministry of Home Affairs to lift liquor ban in the state as it is affecting the state revenue. According to reports, Punjab earns close to Rs 6,000 crore from the liquor sales in the state. But other states, including Karnataka, Maharashtra, Haryana, Rajasthan, Kerala, Tamil Nadu, Goa among others have informally requested the centre to consider relaxing restrictions of the sale of liquor.
Will Liquor Ban Be Lifted?
People waiting outside liquor shops during lockdown
While the Centre’s stand on continuing the ban on liquor, tobacco and gutka remains firm, sources have revealed that the Modi government might consider revisiting its decision.
“We have been given to believe that the central government could revisit the direction prohibiting the sale of alcohol,” the chief secretary of one of the states was quoted as saying by the news agency.
The same report cites a senior central government official tasked with handling COVID-19 crisis, who said that the decision on lifting the ban on the sale of alcohol hasn’t been finalised.
Center’s Reasoning Behind The Restriction
Besides the primary reason that allowing sale of alcohol would flout social distancing norms, a source in the central government suggested the negative impact of alcohol consumption could affect immunity during COVID-19 pandemic. In addition, alcohol consumption encourages “risk-taking behaviours, mental health issues and violence,” the source said citing an advisory by the WHO.
Liquor and beer makers in the country have reached out to State governments to allow alcohol sales outside containment zones, with strict social distancing guidelines, while pitching for online sales and home delivery.
“The alcoholic beverage industry contributes over ₹2 lakh crore in taxes, sustains the livelihood of 40 lakh farmers, and employs 20 lakh people. A prolonged shutdown of industry is forcing lakhs of farmers and workers into joblessness and poverty,” Confederation of Indian Alcoholic Beverage Companies (CIABC) said in its letter to Chief Ministers of all States, barring those under prohibition.
Separately, the All India Brewers Association (AIBA) has also written to CMs of 13 States, including Maharashtra, Goa, Kerala, Karnataka, West Bengal, Punjab, Haryana and New Delhi, with similar requests.
AIBA noted that State governments generate more than ₹36,000 crore of tax revenue per year from beer alone, in the form of excise duties and VAT. “The stringent lockdown measures have brought our business to a complete standstill. Especially during the peak summer of March to June, wherein almost 40% of the year’s sales and revenues are generated. Similarly, the States too stand to lose a substantial part of the annual tax revenue,” it said.
“It is requested to allow alcoholic beverages to be sold through e-commerce and allow for home delivery of beer, through existing retailers with accredited delivery staff. This also will lead to reduced crowding at shops and ensure that beer sales and excise revenue is not impacted adversely by closure of certain outlets,” AIBA said, adding that beer manufacturing plants also be allowed to restart operations, along with opening of ancillary sectors.