Yogi government to cut excise duty to curb liquor smuggling

UP eyeing Rs 20,595 crore in excise revenue during 2017-18

The Yogi Adityanath government in Uttar Pradesh is mulling paring the excise duty to curb rampant liquor smuggling from neighbouring states, especially Haryana.
 
Liquor smuggling is quite rampant in the western region of UP due to higher excise duty levied in the state compared to the neighbouring states, which ultimately results in steeper retail prices of liquor in UP and thus incentivises bootleggers. This hits excise revenues as well apart from the import of cheap liquor and hooch from other states endangering the lives of its consumers.
 
To check illegal liquor trade and smuggling, the Yogi government is preparing to further trim excise duty to narrow the differential and dis-incentivise illicit transportation of liquor from other states to UP territory.

 

“There is a wide price differential between the retail prices of liquor in UP and the neighbouring states, notably Haryana. We are considering to bringing some parity in the excise duty levied in the state to discourage liquor smuggling,” UP excise minister Jai Pratap Singh told Business Standard.
 
However, he noted the excise duty was unlikely to be brought at par but trimmed to bridge the gap to a large extent. The new state excise policy is likely to be announced next month.
 
Last year, the Akhilesh Yadav government had also cut excise duty to curb liquor smuggling, which had translated in the drop of about 25 per cent in the shelf prices of Indian Made Foreign Liquor (IMFL). The prices of country liquor had also fallen. The state had been incurring heavy revenue losses to the tune of about 20 percent owing to rampant smuggling from the neighbouring states and the cut was expected to address the same.

 
Meanwhile, UP is targetting Rs 20,595 crore in excise revenue during the current financial year 2017-18, an increase of almost 45 per cent compared to net excise revenue mop up during 2016-17. Last financial year, the revenue collection had grown by an abysmal 1.35 per cent. Over the last five years, the second steepest increase in excise duty collection was recorded in 2013-14, when the mop up grew by 19 per cent to Rs 11,643 crore.
 
Meanwhile, Singh yesterday directed officials to further strengthen the vigilance swoop down upon illicit liquor manufacturing and interstate smuggling syndicates. Besides, the officials have been asked to ensure that the excise revenue targets are met, since it constituted a vital component of the state exchequer.

 
During November 2017, the excise revenue stood at Rs 1,200 crore compared to Rs 1,064 crore, thus clocking higher collection by over 10 per cent.
 
This financial year, over 2.6 million illicit liquor and 1,215 vehicles have been seized in UP and over 6,000 persons arrested during the excise department clampdowns.
 
Meanwhile, UP registered production of 6 million tonnes of molasses during the previous 2016-17 sugarcane crushing season.