Kerala govt raises excise duty on IMFL by Rs 10 per litre

The Kerala government has implemented a new excise duty adjustment on Indian-made foreign liquor (IMFL), increasing the duty by Rs 10 per litre. This change is part of the state's efforts to generate additional revenue and is expected to bring in an estimated Rs. 200 crore. The specific brands that will see a price increase due to this adjustment have not been disclosed.

This hike in excise duty is just one aspect of the broader liquor policy changes in Kerala. The state has also introduced a Social Security Cess on IMFL, with a Rs 20 cess on bottles priced within the Rs 500-Rs 999 range and a Rs 40 cess on more expensive bottles. However, in practice, customers are paying an additional Rs 30 and Rs 50 respectively, due to tax commitments on the cess.

Moreover, Kerala's new liquor policy aims to boost the state's alcohol production by reopening defunct breweries and enhancing the capacity of existing ones. The government plans to issue more foreign liquor retail licenses and will soon grant pub licenses to IT and industrial parks.

In terms of taxation, the excise duty on liquor in Kerala is calculated in slabs ranging from 21.5% to 23.5% of the purchase cost per proof litre, with the highest rate being Rs 237 per proof litre. Additionally, the state has recently revised its sales taxes, which is set to further increase liquor revenue.

These fiscal measures come at a time when the state is also dealing with the implementation of social security cesses on fuel and liquor, as well as tax hikes announced in the 2023-24 budget. These have led to increased prices for petrol, diesel, and liquor, sparking protests and debates over the financial burden on consumers.

Meanwhile, in the budget revealed by Kerala Finance Minister KN Balagopal on Monday, there was no augmentation in the welfare pension. Balagopal attributed the delay in implementing various schemes and disbursing social security pensions to obstacles posed by the central government. He assured that the pending welfare pensions would be distributed within this fiscal year.

During the budget speech, lasting over 2.30 hours, Kerala Finance Minister KN Balagopal unveiled several measures, including a Rs 10 increase in the minimum support price for rubber farmers and the imposition of a Rs 10 per litre excise duty on Indian-made foreign liquor. Emphasizing the LDF government's commitment, he outlined plans to attract over Rs 3 lakh crore in investments over the next three years.

In a move targeting the upcoming Lok Sabha election, the Kerala budget revealed a reduction in the tax on the registration of buses originating from the state. Additionally, the finance minister announced a Rs 10 hike in the minimum support price for rubber. The budget allocated Rs 1,698 crore for the traditional agricultural sector, and the local self-government department received Rs 8,000 crore for the fiscal year 2024-25.

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