Taxing time awaits Pune tipplers as permit rooms & bars plan to up menu prices

Time of India

5 days ago

Pune: Hard times await tipplers with owners of bars and permit rooms in the city making it clear that if state govt does not reverse its nod to revise the excise tax and liquor licence fees, they would pass on the financial burden to their customers.
The price of a quarter bottle (180ml) of regular alcohol, currently available for Rs150, is likely to go up byRs90-100 with the state cabinet recently approving a revision in excise taxes. Similarly, liquor prices in permit rooms or bars are expected to rise proportionately, taking into account the increased taxes.
"It will, however, not be a standard increase. Different brands will have different price increases," said Sudhakar Shetty, president of Indian Hotel and Restaurant Association.
"For premium brands, we estimate a 15-20% increase. For Indian-made foreign liquor (IMFL) and mass brands, the rise could be in the 60-70% bracket," he said.
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Permit rooms and bars across the state remained closed on Monday in protest against the Maharashtra govt's decision to increase taxes and licence fees.
If the industry is to survive, owners are demanding a rollback of VAT, a phased increase in excise duty, and a limited increase in licence fees.
Girish Poojari, owner of a restaurant and bar in Kharadi, said: "If a quarter bottle of regular alcohol costs us between Rs150 and Rs300, no one will be willing to pay Rs400-500. Many licences will be surrendered. We will also keep an eye on our business for 1-2 months and do a calculation to see if business is feasible.
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Menu prices were likely to go up by at least 15%, said Saili Jahagirdar, owner of a bistro in Kothrud. "If licence fees are reduced, many restaurants can afford alcohol licences.
This will also increase state revenues," she said.
For smaller permit rooms and bars, the increase in prices will drive away 30-40% of the customers, the operators fear. "We have two options — either to increase the seating capacity or surrender the licence. With high licence fees and taxes, customers will not be able to afford liquor. Rentals, salary costs and overheads are difficult to manage if inflows are less," said an owner of a 150-seater permit room in Dhankawadi.
Vishwanath Poojari, who runs a resto bar in Katraj, said, "About 30% of my customers will go to shops if prices are increased substantially. We are waiting for all the brands to finalise price increases before we increase the menu prices."
All this could have a cascading impact on employment as many owners said they would be forced to reduce staff strength to manage costs.
Ajinkya Udane, co-chapter head, National Restaurant Association of India (NRAI), said: "It (the rise in excise taxes and licence fees) will destroy small permit rooms and bars. At the end of the day, they also have to sustain and do business. Even a small permit room bar will have 15-20 employees."
Rajesh Nadkarni, a resident of Karvenagar, said: "We may have to reduce our outings if alcohol prices increase so much. It is cheaper to buy directly from a store as the effective price increase would be less."