The Kerala government has decided to hike the price of liquor in the state to tide over the financial crisis caused by the COVID-19 pandemic. The state government would bring an ordinance to this effect, a state cabinet meeting decided on Wednesday.

The steep hike means liquor drinkers would now pay a 10 percent sales tax per bottle of beer and wine, respectively. For other types of liquor, a 35 percent sales tax has been announced.

“All major sources of revenue to the state have become empty due to the lockdown. The sale of lottery has been stopped, Kerala State Beverages Corporation outlets have been shut; there has been a huge decline in the revenue from Goods and Services Tax. It is in this backdrop that there is an attempt to find a new source of revenue,” said a government statement on the cabinet decision.

Following the cabinet meeting, Finance Minister Thomas Isaac told media persons that it has been decided to bring an ordinance to hike the sales tax per bottle on liquor. An ordinance to amend the Kerala General Sales Tax Act would be recommended to the Governor.

According to reports, the state government hopes to create an additional revenue of Rs 2,000 crore through the price hike. 

The Kerala State Planning Board has estimated a loss of Rs 80,000 crore to the economy owing to the lockdown forced by the COVID-19 pandemic.

However, the state is yet to decide on the reopening of liquor shops, which were ordered shut when the COVID-19 cases first saw a major spike.

The state is reportedly planning to introduce virtual queue systems through a mobile app when outlets are opened. It has also been decided to arrange for takeaway facilities available in bars. 

Toddy shops in the state reopened on Wednesday.

 Liquor sales contribute a major share to the state’s economy. The Managing Director of the State Beverages Corporation (Bevco) Spurjan Kumar had told TNM earlier that the daily liquor sales bring in as much as Rs 40 crore with the sale of 10 lakh bottles.