Why beer in Goa costs you Rs 100 but Rs 305 in Karnataka, Rs 229 in Telangana?
A bottle of alcohol priced at Rs 100 in Goa can cost as much as Rs 305 in neighbouring Karnataka, Rs 229 in Telangana, and Rs 205 in Rajasthan—highlighting the stark disparity in liquor prices across states due to varying excise duties and taxes, reported TOI.
Despite a marginal increase in recent years, Goa continues to levy the lowest excise duty at 55 per cent , while Karnataka imposes the highest at 80 per cent , according to the International Spirits & Wine Association of India.
This wide gap in taxation has a noticeable impact on retail prices. For instance, a bottle of Black Label whisky costs Rs 3,310 in Delhi, Rs 4,200 in Mumbai, and nearly Rs 5,200 in Karnataka.
Industry experts argue that such inconsistencies undermine the 'one nation, one tax' vision. Yet, state finance ministers have shown little inclination to address the issue, even as high-tax states lose revenue to bootlegging and illicit trade, according to a TOI report.
With excise on liquor and VAT on petrol and diesel being the only major sources of revenue for states after the introduction of goods and services tax, finance ministers are reluctant to give up further taxation powers, especially in a season of freebies, when the tax is used to bridge the deficit.
"While we recognise that the states have to augment their revenues, there is a need to build a sustainable model which focuses on stability and allows consumers to uptrade through premiumisation. This can be achieved through tax rationalisation and creating a pricing ladder that allows consumers to uptrade, thereby building the ethos of drink less, drink better. We have seen revenue growth in the past in states like Maharashtra and Karnataka, where price correction through tax rationalisation has helped in incremental revenue growth that is sustainable," said Sanjit Padhi, CEO, ISWAI, the industry lobby representing global giants told TOI .
Rival body Confederation of Indian Alcoholic Beverage Industry too has said that different tax levels across states is a big challenge for the industry. "There is no cohesive strategy for the Indian alcoholic beverage industry. The industry needs a uniform taxation mechanism which will propel the growth," CIABC's Deepak Roy told TOI.>
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