In the budget, the government has talked about implementing new Agri Infra Development Cess. At the same time, it has been announced to impose up to 100 percent agri infra cess on alcoholic beverages.
On Monday, Finance Minister Nirmala Sitharaman presented the General Budget 2021-22. In the budget, the government has talked about implementing new Agri Infra Development Cess. At the same time, it has been announced to impose up to 100 percent agri infra cess on alcoholic beverages and this cess has also been imposed on petrol and diesel. However, there is no change in prices yet. Alcohol is such a thing, on which taxes are paid by the governments to pay big money.
If we talk about the tax on alcohol, then it is the most important means of earning of the states. Yes, when a person buys a bottle of wine, more than half of the money in it goes to the government treasury in the form of tax. In such a situation, today we try to understand how much tax is levied on alcohol and how it is collected, as well as who has more profit in it…
What is the tax on alcohol?
Although tax is charged from the GST system in the country, but liquor like petrol and diesel is out of GST. Therefore, the state governments impose taxes on liquor according to their own. States generally impose a tax on making and selling liquor, which is charged in the name of excise duty. Many states have provided VAT for this. Apart from excise duty, many charges like special cess, transport fees, labels and registration have been imposed on liquor. This system is different for every state.
If we talk about Uttar Pradesh, then there is a separate cess for cow, whereas in other states it is not. Apart from this, some state governments levy different taxes on the import of foreign liquor, on their labeling and their registration, hence each state has different rates of liquor. If the wine you are getting expensive in Delhi, then it may be found in other states for less. So it depends on the state.
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According to what tax is determined?
Actually, the tax on alcohol is difficult to understand in a way. One, all states levy different taxes. The second thing is that the tax system changes according to each product. For example, beer, whiskey, rum, scorch, country liquor, etc. are taxed differently. In this also, labeling and excise duty is charged according to the manufactured in India (imported in India), India made foreign liquor, country liquor (also different products). In such a situation, every liquor has a different tax system in every state.
For example, if you talk about Rajasthan, there is 35 percent tax on India Made Foreign Liquor worth less than Rs 900. Similarly, India Made Foreign Liquor worth more than Rs 900 attracts 45% tax. Recently, the Rajasthan government increased excise tax on liquor by 10 percent. In the state, the tax on foreign liquor (IMFL) manufactured in the country has been increased from 35 to 45 percent. Similarly, the tax on beer was also increased to 45 percent.
How much tax on a bottle?
If you guess the average, then if you buy liquor of 1000 rupees, then you pay 35 to 50 or more tax in it. That is, on buying liquor of 1000 rupees, out of your 1000 rupees, the money from 350 to 500 rupees does not go to the shopkeeper or the liquor company, but to the government treasury. Due to such a huge tax on the government, the states earn billions of rupees only from alcohol.
