Maharashtra will increase VAT by 5% for allow room liquor companies, affecting bars, lounges, and cafes.
Starting from November 1, liquor served in bars, lounges, and cafes in Maharashtra is ready to turn out to be dearer because the state authorities plans to extend the Value Added Tax (VAT) by 5 % for allow room liquor companies. This transfer, nevertheless, won’t affect the prices for over-the-counter gross sales at wine retailers.
A authorities decision outlining the tax hike was issued on a current Friday. Consequently, the whole VAT charge on allow room liquors will now be 10 %.
It’s price noting that liquor companies in star motels will not expertise a tax improve as they already pay the next VAT charge, at present set at 20 %.
Discussing the implications of the VAT charge improve, hoteliers expressed considerations. They talked about that the current surge in license charges imposed by the federal government had already raised the price of liquor for shoppers, making the choice to additional improve VAT stunning.
According to Pradeep Shetty, the president of the Hotels and Restaurants Association of Western India (HRAWI), the transfer comes at a time when many states are actively reducing excise duties to spice up their tourism business and drive financial development. Some examples of this development embody Goa, Chandigarh, and Haryana.
Industry sources cited by TOI advised that this VAT improve might steer prospects towards extra inexpensive options like off-premise consumption, equivalent to having fun with drinks on constructing terraces, in parks, on seashores, or in parked autos. Such a shift in shopper habits couldn’t solely hurt bars and eating places economically but additionally pose potential challenges to regulation and order, significantly concerning points like consuming and driving.
In addition to the VAT improve, the state authorities is reportedly contemplating a brand new excise coverage that may hyperlink pricing to the alcohol content material of drinks and permit the sale of bottled liquors in bars and allow rooms.
This information comes in the wake of a earlier report about rising liquor prices in Gurugram attributable to shortages of fashionable manufacturers in Delhi. The scarcity was attributed to Delhi’s controversial excise coverage and the rejection of sale licenses for main liquor firms, which led to greater prices in Gurugram as prospects sought out fashionable alcohol manufacturers.
