Himachal government reluctant to impose liquor cess

Pratibha Chauhan

Tribune News Service

Shimla, May 7

Imposing liquor cess has proved to be a revenue generator for many states but Himachal is reluctant to enhance liquor rates as this could adversely impact tourism which has already taken a severe beating due to corona outbreak.

The issue has been discussed at the highest level and it is felt that since the maximum consumption is by tourists, imposing a cess could prove to be a further deterrence to tourism when the economy is already reeling under severe corona impact. However, the issue will be placed before the Cabinet tomorrow.

Cabinet to decide today

The issue has been discussed at the highest level and it is felt that since the maximum consumption is by tourists, imposing a cess could prove to be a further deterrence to tourism when the economy is already reeling under severe corona impact. However, the issue will be placed before the Cabinet tomorrow.

“Unlike states like Delhi and Haryana, in the case of Himachal tourism could be hit if we enhance liquor rates by imposing a cess but the Cabinet will be taking a final call on it,” said Sanjay Kundu, Principal Secretary to CM, who is looking after Excise and taxation.

Himachal sells almost nine crore bottles annually and had it not been for corona pandemic, the excise department had set an enhanced target. Himachal is already charging Rs 1.50 per bottle for cow protection, Rs 2.50 goes to the kitty of the concerned panchayat or the local urban body and Re 1 for running the 108 ambulance service. As such imposing a new cess could not go down well, especially with hoteliers and restaurants.

“Being a state where tourism is a major revenue generating sector, imposing cess on liquor could prove to be counterproductive though Cabinet will take a final call on it tomorrow,” asserts Kundu.

Hoteliers and others associated with the tourism industry are already seeking concessions and incentives in case tourism has to be revived in the state.

The fact that more than three lakh people are employed directly or indirectly with the tourism makes it even more essential for the government to act responsibly.

Liquor sales are quite high in all the tourist attractions like Shimla, Kullu-Manali, Dharamsala-McLeodganj, Dalhousie and Kasauli. The government earned a revenue of Rs 1,700 crore from sale of liquor in 2020-21 and the targets set for the current financial year is Rs 1,840 crore which now seem unachievable with the corona pandemic gripping the world.

The Cabinet in its last meeting on May 2 decided that excise and taxation license fee would be waived and lifting quota of bars would be on pro-rata basis. These steps have been taken to help the various stakeholders in the tourism industry to tide over the corona crisis.