Your booze bill just went up

MUMBAI: Partying with your friends with a pitcher of beer will marginally go up by around 5 per cent in restaurants, bars and shops while at graded hotels and luxury bars it could be even more costly.
Maharashtra government has increased the excise duty on all types of liquor, except wine, which manufacturers will eventually pass on to consumers through distributors and bar owners.Meanwhile, the state has also increased the tax on carbonated soft drinks from 12.5 per cent to 20 per cent which are normally used to mix with the peg of liquor thus taking up the prices further.
Liquor is already heavily taxed in the state and the recent Union budget presented by Pranab Mukherjee imposed service tax up to minimum 3 per cent on air-conditioned restaurants and bars hiking the rates.
Increase in excise duty will increase the cost marginally for consumers drinking at local bars and shops because the state has also reduced VAT burden on such consumers to 5 per cent.
However, increase in excise duty will surely burden those drinking in luxury bars and hotels graded as four-star and above. This is because the value added tax (VAT) on consumers in bars and shops has been retained at 20 per cent besides the increase in excise duty. In graded hotels the centre has already introduced accommodation tax.
Thus for those drinking at bars, restaurants and shops, the liquor will come at a marginally higher price while those at graded hotels and luxury bars it will be on higher side.
Deputy chief minister and state finance minister Ajit Pawar while reading out his budget speech at the state legislature said the state has decided to change the method of charging excise duty, maximum retail price (excluding VAT) and minimum excise duty on country liquor, Indian made foreign liquor and beer so as to increase the revenue of the state.
This, according to experts, with the Maharashtra Wine Merchants Association will benefit the government by earning up to Rs 500 crore more for the state government. State will get taxes in advance unlike in the present case where they get it after a month or two.
State has increased minimum rate of excise duty to Rs 95 per proof litre for country liquor, Rs 240 per proof litre for foreign liquor, Rs 33 per bulk litre for mild beer and Rs 42 per bulk litre for fermented beer.
Sudhakar Shetty, President of Ahar, an association of over 7,000 restaurants and bars in Mumbai, said the impact on the consumers at their bars would be marginal. Sukesh Shetty, secretary of Ahar, said the final effect on consumers will be known in a day or two as calculations involved several taxes.