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Despite lockdown, Karnataka records high excise revenue

₹3,650 crore collected in April and May, against ₹1,404 crore last year in the 2 months

The State, even while in the grip of COVID-19, has reported higher excise revenue collections over the last two months compared to the corresponding period in the previous year.

This comes despite the sale of beer falling steeply and the Indian Made Liquor (IML) sales falling marginally in May, when lockdown was in place.

Coming amid complaints of poor sale by the liquor industry, the figures show that the excise revenue of ₹3,650 crore has been collected this year in April and May against ₹1,404.08 crore collected last year in the same months.

‘Not comparable’

The industry, however, was quick to say that last year’s figures cannot be compared to this year since liquor outlets were closed completely in April and opened only in early May.

The excise revenue collected for April and May this year was ₹2,205 crore and ₹1,445 crore, respectively. On an average, the monthly excise duty collection is around ₹2,000 crore.

The steepest fall, however, has been reported in the sale of beer during May when strict lockdown was enforced by several districts apart from the Statewide strictures that capped business hours in the morning to four hours. While 12.29 lakh boxes were sold in May 2020, it fell to 7.67 lakh boxes in May this year. In fact, in April, 25.7 lakh carton boxes had been sold. In 2019, when business was normal, 58 lakh cartons had been sold in two months.

The figures for IML in May show that sales marginally fell from 44.46 lakh carton boxes in 2020 to 43.67 lakh carton boxes in 2021. In April, 55.99 lakh cartons were sold. In 2019, a total of 91 lakh cartons had been sold in two months.

“The sale of beer has dropped steeply since sale had been allowed early in the morning. Beer cannot be consumed everywhere. Currently, strict lockdowns are in force in 20 districts where sales have dropped drastically,” said B. Govindaraj Hegde, secretary of Federation of Wine Merchants Association Karnataka.

Duty factor

“If the revenue has increased despite a decline in sales that is due to a steep increase in duty last year,” Mr. Hegde said.

He said that it had become extremely difficult to retain staff in about 5,400 liquor vending premises that also run restaurants. “The industry had started showing signs of revival by November and the lockdown has pushed it back,” he said.

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