Reopening of Tasmac outlets in Chennai to boost State govt revenues

The closure of Tamil Nadu government-owned Tasmac liquor shops for 146 days in Chennai has cost the State exchequer nearly ₹2,600 crore in revenues, including VAT and Excise Duty, said a senior government official.

Tasmac shops in the city that were closed from March 24 due to Covid-19 pandemic are to reopen on Tuesday to the delight of thousands of tipplers. The shops will remain open from 10 a.m. to 7 p.m. Every day, each shop can issue only 500 tokens to customers. Wearing a mask is compulsory for customers coming to the shops and social distancing should be maintained.

There are nearly 750 Tasmac outlets in the Chennai region and the average daily sale of liquor in the city is nearly ₹12 crore. However, bars attached to the Tasmac outlets will remain shut.

On May 4, the State government allowed opening of liquor shops in the State (except Chennai) from May 7 to fight the deepening economic crisis due to the lockdown. The reopening saw a record sales worth nearly ₹170 crore in the State (except Chennai). However, the reopening drew large scale protests over fears of spike in coronavirus cases, as was witnessed at the Koyambedu vegetable market.

On May 8, the Madras High Court had ordered all Tasmac liquor shops to be shut down till the end of lockdown on May 17. The Court took note of complaints regarding violation of physical distancing in many places. The Court also warned that if the norms were violated, it would direct closures of the shops.

However, liquor sale in the State (except Chennai and Tiruvallur police jurisdiction) resumed from May 17 after the Supreme Court stayed an order of the Madras High Court.

Interestingly on May 6, the State government increased excise duty on liquor by 15 per cent to boost revenue. The increase was ₹10 for normal brands and ₹20 per 180 ml bottle for premium brands.

Liquor revenues

Tamil Nadu government’s dependence on liquor sale is huge as revenue generated by Tasmac for 2019-20 was nearly ₹31,000 crore of which about ₹6,600 crore was from Excise revenue and ₹22,000 crore from VAT.

Tasmac, which has been doing retail business from November 2003, procures IMFL and beer stocks locally from 11 IMFL manufacturers and seven beer manufacturers in the State. It also procures wine locally from one manufacturer, and scotch, whisky and few wine brands from other States. Tasmac also engages in retail sale of foreign liquor, according information provided on the Tasmac website.

Distribution of IMFL and beer to the licensees is being done through the 43 depots of Tasmac located throughout the State.