An industry body has asked the Centre to lift the ban on the sale of alcoholic beverage (alco-bev) products, stating that the revenue loss for the States collectively is a whopping ₹700 crore per day.
Amrit Kiran Singh, Chairman of the International Spirits & Wines Association of India, which represents Diageo, Pernod Ricard, Bacardi, Beam Suntory and others, told BusinessLine that the total revenue generated by all the States put together from excise duty during FY20 from the sale of liquor was ₹2.48 lakh crore.
“Any delay in lifting the ban could lead to the proliferation of illicit liquor, which last year killed several hundred people. We are sitting on a time bomb. Not just that -- when the States are desperate for revenue to fight the coronavirus pandemic, it is important to review the ban,” he said. Singh said he has written a letter to the Secretary, Department of Consumer Affairs, seeking his intervention to lift the ban.
He pointed out that as per the Food Safety & Standards Act, 2006, alcohol is classified as a food that is an essential item. “States are already under pressure financially and excise duty on alcohol is an important revenue source for them, which does not exist at the moment.” The alco-bev industry employs about 1 million people.
Earlier this week, several States raised bonds from the market at a rate 150-200 basis points (bps) higher than government securities, compared to a 60-70 bps spread earlier, which goes to show the dire need for finances to run the States and provide succour to virus-affected patients, Singh said.
He suggested that the States can consider allowing certain off-retail vends that would ensure consumer accessibility to legitimate products and direct excise officials to monitor social distancing. It was also suggested that States could allow home delivery of liquor and permit the retail sale of alco-bev products at grocery shops and departmental stores.
In his letter to the Secretary, Singh said excise revenues account for approximately 20 per cent of States’ total revenues and, therefore, closure of vends would pose a significant risk. “The States should consider this as an opportunity to test the waters on e-tailing of alcoholic beverages. It is further in line with the Central government directive to allow e-commerce players to operate during the lockdown. E-tailing of alco-bev products is already permitted in most parts of the world across Europe, Asia and America.”