Booze to get even more expensive in Chennai, govt levies more tax to increase revenue

It's more bad new for tipplers in Tamil Nadu. After the State Government shut down 500 Tasmac shops in February, they have now proposed an extra tax on sales of alcohol, making it more expensive. The Tamil Nadu Government, according to the Times of India, moved a bill on Thursday in the state assembly for the levy of of an additional 5% tax on sale of liquor. 

 

Commercial taxes minister KC Veeramani reportedly moved the bill to amend the Tamil Nadu Value Added Tax Act, 2006, in an effort to augment the state's revenue. According to media reports, the board of the state-owned Tamil Nadu State marketing corporation limited (Tasmac), which has the monopoly over wholesale and retail sale of alcoholic beverages in the state, will be meeting on March 27. This is to decide on the implementation of the proposal. 

 

As per the ToI report, the statement of objects and reasons in the bill state that the Government has decided to amend the 2006 act in order to make a provision to levy additional tax with retrospective effect from April 1, 2016, on the taxable turnover of the intra-state sale of alcoholic liquors of all kinds of human consumption. 

 

The Government has reportedly also decided to make provision in the Act to notify different rates if additional tax for different types of alcoholic liquors. The statement also justified the move by stating that provision for levy of additional tax on goods is available in VAT acts of other states such as Gujarat, Uttar Pradesh, Uttarakhand adn Madhya Pradesh.

 

The Tamil Nadu Government's move comes a week after it presented its budget where no additional or increase in tax was announced. Several experts had then questioned how the Government will bridge its large fiscal deficit, without creating new avenues of tax income.