Tuesday, May 5, 2020

Liquor shops are more important to open for state government- Understand Why?

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In this article we will understand why Liquor shops opened before the opening of Temples, Mosque, Church etc. We all know that the major revenue source of state governments comes from Excise duty of Liquor. Government also knows that there will be a rush as soon as the shop opens. Even though they decide to open this. Everyone wants to know that. Let's understand why.....

How liquor more important for state revanue
Liquor shos opened


How much Excise duty on Liquor contributes to State Revenue?

When Government was implemented GST over the whole of India, it was decided that liquor would not fall under GST. Liquor still falling under Excise duty. The main reason for this decision was the same as this is the major revenue source of any state(Except Gujrat and Bihar).

Recently RBI announced that all 29 states and 2 UT's(Delhi and Puducherry) consolidated budgeted revenue for F.Y 2019-20 from Excise duty on liquor is amounting to Rs. 1,75,501.42 Crore. Which is more than 16% compared to the last F.Y(2018-19). In the F.Y 2018-19 Budgeted revenue from Excise duty on liquor was amounting to Rs.1,50,657.96 Crore.

We also must understand that around 15% of total revenue by a state collected from Excise duty on liquor. Which is the most after GST collection for any state.

By all of this, we can understand how much liquor is important for any state in terms of revenue.

Who prohibited liquor in their state.

We have to salute to Gujrat and Bihar that even after having the main source of income from sale of liquor. It was completely prohibited in these states.

Which state earns most from Excise duty on liquor? 

Which state earned as excise duty(In crore)
All states and 2 UT's -1,50,657.96 Crore(2018-19(RE)) and  Rs.1,75,501.42 Crore(2019-20(Budget))

Uttar Pradesh- Rs.25,100 Crore(2018-19(RE) and Rs.31,517.41 Crore(2019-20(Budget))
Karnataka-Rs.19,750 Crore (2018-19(RE) and Rs.20,950 Crore(2019-20(Budget))
Maharastra -Rs.15,343.08 Crore (2018-19(RE) and  Rs.17,477.38 Crore(2019-20(Budget))
West Bengal-Rs.10,554.36 Crore and Rs.11,873.65 Crore((2019-20(Budget))

Source: State Finance-Budget 2019-20(RBI)

Review: In this pandemic situation under which government closed the whole of India and now after completion of 2 lockdowns and running 3rd lockdown, Govt. should try to open other revenue sources rather liquor.

You can also read:Extention of 3rd lockdown


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