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Excise duty hike may push up liquor prices
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Saturday, 24 March, 2007, 08 : 00 AM [IST]
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Our Bureau, Mumbai
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increase in excise duty on fermented beer, Indian made foreign liquor (IMFL) and country liquor, tipplers in Maharashtra may have to pay more for their drinks. A bottle of Kingfisher Strong or Haywards beer is likely to cost Rs 10-15 more, accpordiong to industry sources. Already the prices of liquor in the state is very high compared to other states. The average price of beer in the country is Rs 55-57 per bottle, while in Maharashtra it costs Rs 65-70.
In the case of fermented beer, currently the excise duty is equal to the manufacturing cost, and now it has been increased to one-and-quarter times of the manufacturing cost. Liquor companies say this will result in prices going up by Rs 10-15 per bottle.
In the case of IMFL, for calculation of excise duty purpose, the minimum manufacturing cost has been increased from Rs 88 to Rs 92 per litre. For the tipplers it translates into a hike of Rs 7-8 per litre of Indian whisky and other spirits. Excise duty on country liquor has been increased by Rs 5 to Rs 60 per litre.
While finance minister Jayant Patil insisted that the MRP on fermented beer would not go up, state excise commissioner C Sangitrao spoke of a Re 1 to Rs 2 hike per bottle. However, according to UB executives, the prices of its brands would go up by Rs 10. Maharashtra is the second largest consumer of beer in the country, with about 250 lakh cases consumed every year. Andhra Pradesh tops the list.
Companies manufacturing IMFL said they would take a final call on price revision only after going through the fine print of the budget. The proposed kike in excise duty on IMFL is likely to see a Rs 7-8 increase per litre. The cost of country liquor is also likely to go up but only marginally, Rs 1.75 for 750ml.
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