Liquor prices may go up as Kerala set to hike sales tax

Representational Image | Photo: Mathrubhumi

Thiruvananthapuram: Kerala government has decided to increase the sales tax for liquor again to substitute the revenue loss incurred by waiving off the Turnover Tax (ToT) over distillers. The sales tax on liquor will touch 251 per cent with the proposed hike of 4 per cent. The cabinet has approved the draft of the sales tax amendment bill, which would be tabled in the Assembly session on Monday.

The new tax rate will come into force soon after the governor signs the bill passed in the Assembly. Along with the surge in sales tax, the government has mulled over increasing an extra one per cent cost to meet the operational charges of the Kerala State Beverages Corporation. A special order will be released for this. Hence, a total of 5 per cent hike has been expected in the liquor price.

The distillers were pressing the government to escalate the liquor price by pointing out the soaring production cost. However, the government refrained to hike the cost and this urged the companies to stop distributing liquor to the beverages corporation. Later, the government decided to resolve the stalemate by considering the possibility of liquor shortage and hooch production in the state. Instead of allowing the distillers to increase the cost, the government resorted to forgo the Turnover Tax paid by the liquor manufacturers to the excise department.

The opposition has alleged corruption in waiving off the Turnover Tax and demanded to launch a probe over the matter.

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