“If a 30% increase in consumer prices brought on by the imposition of VAT could bring sales down as shown above, it is frightening to envisage what a further hike in taxes on spirits will do to liquor sales in the state and consequently to the government’s tax collections,” it added.
Under the proposed policy, consumer prices of fast-moving brands will go up by 40-90% (translating to Rs 150 to Rs 450 per bottle), as a consequence of the changes in taxation and in trade margins, the bodies said.
CIABC Director General Vinod Giri said, “Excise policy proposed by the West Bengal
Excise department on August 19 has created great concerns amongst companies.
Industry fears that this policy will create undue disruptions and even possible job losses just before the peak Puja times. The proposed policy also uses a deeply flawed concept of inter-state price comparisons because the operating conditions vary considerably across states.”
He pointed out that consumer price differences between West Bengal
and the neighboring states, which were already high after the imposition of VAT in April this year, would go up even further if the policy wasimplemented.
State borders, not just in the east, but all across the country, tend to be porous and such high price differences will just incentivize cross-border smuggling of alcohol, most of it illicit, and even spurious. Further, such high consumer prices in the state will give rise to illegal and spurious manufacturers in West Bengal or neighbouring states, Giri said.