Drinkers have to pay more for Alcohol in Clubs, hotels, and pubs because of 5% increase in VAT on alcohols in Maharashtra from 1 November

Drinkers have to pay more for alcohol in Clubs from 1 November in Maharashtra, Reason

Drinkers have to pay more for alcohol in Clubs In Maharashtra, as of November 1, Also patrons of restaurants, bars, and other establishments may find themselves forking over more rupees for their preferred alcoholic beverages. This financial burden stems from a notable 5% uptick in the Value Added Tax (VAT) on liquors, a decision announced by the state Government.

The State’s finance department issued a notice outlining this change, which specifically doubles the VAT rate for permit room liquor services to a hefty 10%, as reported by the Times of India.

Industry insiders suggest that this surge in VAT on alcohol may have far-reaching consequences, potentially influencing not only consumer behavior but also the overall law and order situation in the region. With the increased cost of alcohol, it is anticipated that consumers may turn to more budget-friendly alternatives, such as enjoying their libations off-site. Consequently, we may see an uptick in people congregating on building terraces, in parks, on beaches, or within parked vehicles to indulge in their favorite spirits, as reported by TOI.

This shift in consumer preference could pose challenges for local authorities. Additionally, the government is contemplating a new excise policy that links alcohol pricing to the beverage’s alcohol content. This policy may also open the door to the sale of bottled liquors in bars and permit rooms, as reported by the Free Press Journal. As of now, a timeline for the implementation of this excise policy remains undisclosed. While it is expected to potentially lower beer prices, its primary objective is to Bolster Government Revenue.

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Historically, the sale of liquor has represented a substantial source of income for the government. In a recent development, the Goods and Services Tax (GST) department in Mumbai proposed a tax hike on alcoholic beverages served in restaurants and hotels with less than a 3-star rating, as reported by the Hindustan Times. The proposal suggests raising the tax rate from 5% to a range of 10-15% in these establishments. This change could significantly bolster government revenue, potentially increasing it by ₹300 to ₹600 crore annually. Furthermore, the department is considering adjustments to taxes on gold and gold jewelry, as well as standardizing the taxation of fabrics and ready-made garments.

This complex interplay of fiscal policies and their implications underscores the dynamic nature of the liquor industry in Maharashtra, where both consumers and the government navigate a changing landscape.