Maharashtra halves liquor licence fee

The Maharashtra government has decided to pare the licence fee hike for five liquor categories to 150-200 per cent.

In October 2001, the government had announced a 200-400 per cent hike in the licence fees for various categories.

A government media release said while the licence fee hike had been announced in 15 categories of liquor, a rethink in the wake of protests by the liquor industry has resulted in the new decision, restricting the hike to certain categories.

The five categories of liquor manufacturing and sale for which the licence fee hike would be restricted to 150-200 per cent are the wholesale segment of foreign liquor, retail segment of foreign sale, permit rooms and wholesale and retail sale of country-made liquor.

The release said the decision was in response to repeated pleas by wholesalers' and retailers' associations that an unrealistic license fee hike would run these segments of the industry out of business.

The government also decided on Wednesday to levy an additional sales tax on country-made liquor manufacturing units at Rs 18 per box.

This will result in an additional revenue of Rs 28 crore annually for the state and is intended to offset the notional loss that would arise out of the decision to restrict the licence fee hike that has been announced, the official release said.

The state government's decision in October, 2001, to raise the licence fees for liquor manufacturing and sales had evoked widespread protests from wine merchants, restaurateurs, permit rooms and manufacturers who felt they were already burdened with a high levy.

Wine shop owners in particular felt that their business would be the most hit as they could not pass on the cost to their customers since they are in the retailing sector where prices of products are pre-determined.

Hotel and restaurateurs, especially from Mumbai, contended that passing on the cost burden of the high licence fee to the customer would be an unviable option in the wake of the already dwindling numbers in their clientele.

A couple of shutdowns were observed by the retailing sector and representations were made to the state government to desist from introducing such a huge hike in the license fee. The decision restricting the fee is seen as a fallout of these protests.