Your Booze Could Cost More In Delhi This Festive Season: Here's Why

(MENAFN- Live Mint) Liquor prices may increase in the national capital ahead of the festive season, with the Rekha Gupta-led Delhi government planning to raise excise duty and retail margins to boost revenue under its new excise policy, The Indian Express reported.

The policy is likely to be notified in October, according to the report.

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The entry of private players into Delhi's liquor business is unlikely.

But raising the fixed retail margin and excise duty are among the policy's key objectives. This will be a major change, as currently there are only government-run liquor shops in the city. Retailers do not earn much revenue due to fixed margins, the report said. With this key change, the shops are expected to be upgraded and draw more customers, it said.

Under the current system, excise duty on liquor in Delhi is levied across different Wholesale Price (WSP) slabs and varies depending on the type of liquor. For instance, the duty on Indian spirits ranges from 30% to 300%. Any increase in these slabs is likely to raise the tax component of liquor prices.

Excise duty to be increased too

“If excise duty is increased, liquor prices will also increase,” the report quoted an official as saying.

“The final draft of the new excise policy is ready,” a senior official told The Indian Express.

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Last week, Delhi Excise Commissioner Ravi Jha was transferred to Arunachal Pradesh. Once his replacement is appointed, the draft proposal will be sent to the Delhi Cabinet and Lieutenant Governor Taranjit Singh Sandhu for final approval, according to the report.

If excise duty is increased, liquor prices will also increase.

The Delhi government plans to notify the new policy in October, ahead of the peak festive season.

More premium stores in Delhi

Last year, Chief Minister Rekha Gupta announced plans to introduce a new excise policy for the national capital. She also constituted a ministerial committee headed by Minister Parvesh Verma to formulate a“transparent and socially secure” policy.

Delhi is also expected to see more premium liquor stores as per the new policy. "Currently, the retail margin cap is fixed at ₹50 on Indian Made Foreign Liquor and ₹100 on foreign liquor on a per-bottle basis. The liquor shops in Delhi do not stock premium imported liquor priced above ₹1,000 due to a fixed margin, which eventually pushes customers to neighbouring cities such as Gurugram and Faridabad, where shops operate without a fixed margin.

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