Fall in Delhi govt's excise revenue 'inexplicable' as sales rise: Report

The office of Delhi's lieutenant governor on Sunday said that the state government's data on excise revenue collection is wrong. The Delhi government said that its excise revenue increased by Rs 1,484 crore in the Q1FY23, owing to the implementation of the revised excise policy, according to a report in Times of India.
 
This came two days after the LG's office recommended a probe by the Central Bureau of Investigation (CBI) into the Delhi government’s excise policy. 
 
The excise revenue of the Delhi government in the first quarter of the current fiscal year remained flat compared to 2019-20 despite a steep rise in whiskey and wine sales, argued the central government's sources. According to the report, data from FY21 and FY22 were not taken in comparison due to the Covid-19 lockdown and the second wave of coronavirus, respectively.

 

While wine sales in Delhi are estimated to have risen 87 per cent, whiskey and beer sales witnessed an increase of 59.5 per cent and 5.5 per cent, respectively, the Centre's sources told Times of India as they added that the mismatch is "stark and inexplicable."
 
“Of the Rs 1,484 crore being touted as excise revenue, Rs 980 crore are refundable security deposits of the vendor licensees. In fact, in the last five financial years, 2017-18 to 2021-22, the revenue earned by the Delhi government through liquor sale has come down by a staggering Rs 567.98 crores,” The Hindustan Times reported, quoting an official.

 
The Delhi government last year in November had lowered the VAT on liquor from 25 per cent to 1 per cent. However, now, the regime has been changed and excise and VAT were merged for the calculation of reserve licence fee.
 
After factoring in the numbers for the last fiscal year including the security deposit, the licence fee component for liquor may add up to nearly Rs 4,500 crore, and along with VAT, the collections are estimated at Rs 5,741 crore, sources told TOI. This collection is nearly Rs 568 crore lower than the collections five years ago as in FY18, it was pegged at Rs 6,309 crore.

 
The central government's sources told TOI that the fall in revenue is difficult to explain.