Maharashtra Liquor Tax Hike Backfires: Foreign Liquor Sales Drop, Local Brands See Surge
Bombay HC Halts 10-Day Liquor Ban In Pune
Kolhapur: The state government’s steep excise duty hike on foreign liquor, aimed at boosting revenue, appears to be backfiring. With prices of imported and Indian-made foreign liquor soaring, many drinkers have shifted to cheaper country liquor, causing a significant drop in bar and permit room sales.
Industry reports suggest that the sale of foreign liquor across Maharashtra has fallen by more than 50%, raising concerns that the government’s plan to increase its revenue may fail. Previously, the state earned around ₹43,000 crore annually from liquor sales. Two months ago, the government imposed an additional 10% VAT, 15% license fee, and 9–70% excise duty hike, expecting an extra ₹14,000 crore in revenue. Instead, sales have slumped drastically.
Bar owners claim customer footfall has dropped by 50–60%, while sales have reduced by 70–80%. The new pricing structure has also created an unintended boost for the country liquor market, while encouraging the illegal trade of spurious liquor, especially along border regions.
In several cases, liquor smuggled from Karnataka is being sold at inflated prices, further draining the state’s expected income. The government now faces the challenge of meeting its ambitious revenue targets amid growing concerns from both businesses and consumers.
