The Telangana and Andhra Pradesh governments have allowed retail liquor stores to have permit rooms, where people can sit and have a couple of drinks within the premises of the shops.
Now, Karnataka retail liquor storeowners want the same. This demand stems out of the recent proposals made during the state budget.
The current budget proposes a 16% hike in additional excise duty on alcohol served in retail liquor outlets, while removing the 5.5% VAT on beer and Indian Made Liquor sold at restaurants and pubs, starting April 1.
The increase in the percentage of additional excise duty has resulted in retailers fearing a huge dip in sales.
The Karnataka Wine Merchants’ Association has sought the permission of government to allow retail liquor stores to have a 10x10ft space for permit rooms, the association president, Honnagiri Gowda said.
“Food will not be served in these permit rooms as we also have to consider the situation of restaurants and bars. We are also planning to write to the Excise Commissioner,” Gowda added.
The association president believes that the huge increase in excise duty coupled with an expensive license fee would affect their business severely.
“The license fee for retail liquor stores will be based on the number of people living in the area where the wine shop is located. Every year, liquor store owners within BBMP limits have to shell out Rs 6.9 lakh,” Gowda said.
According to a report by The Times of India, only 520 lakh cases of Indian made Liquor were sold in the 2016-17 fiscal (till March 20), while 570 cases were sold in the previous fiscal. The corresponding figures for beer are 234 lakh cases and 260 lakh cases.
“Over 2,500 retail liquor stores out of the total 9,700 in the state will be shut down due to the Supreme Court's order prohibiting sale of liquor within a radius of 500m along highways, which will come into effect from April 1,” Gowda added.
According to Rakshit N Jagadale, Executive Director of Amrut Distillers, the government must think of the demand for the product, especially due to the challenges faced by the trade.
“The government has to take into all these factors if the Excise Department has to generate revenue and meet the year’s target. The department has collected Rs 16,000 crore in the 2016-17 fiscal and has set a target of Rs 18,050 crore for the next fiscal,” Jagadale told TOI.