Alcohol has not been included under the proposed national tax owing to fears of state governments of losing control over a vital source of revenue.
MUMBAI: Representatives of liquor industry will appear before a Rajya Sabha select committee on Wednesday to argue their case for inclusion of alcohol under goods andservice tax (GST). Despite intense lobbying by the industry over the past few years, alcohol has not been included under the proposed national tax owing to fears of state governments of losing control over a vital source of revenue.
“GST on alcohol will lead to incremental revenue of Rs 800-1,000 crore for every percentage point of GST. The industry is willing to bear the additional tax burden of Rs 20,000 crore for greater transparency and better regulation when there is seamless coordination between the Centre and state administrations that can help plug revenue leakages,” said Sonjoy Mohanty, secretary general at International Spirits and WinesAssociation of India (ISWAI).
Taxes on alcohol account for about 16% of the tax revenues of state governments on average across the country. In India, states levy taxes on alcohol while the Centre levies duties on imports. State governments also control manufacturing, distribution, retailing and pricing of liquor.
Source: Economic Times