You Might Have To Pay Up To 10% More On MRP For Alcohol After New Excise Policy In Delhi

Liquor prices in the national capital are expected to go up from November 17 under the new excise policy of the Delhi government.

The Delhi government's excise department, which is in the process of fixing the maximum retail price (MRP) of brands to be registered in Delhi, said in an order that the wholesale prices of all types of liquor are likely to increase by 8-9 per cent.

"The increase in wholesale price will lead to at least 5-10 per cent increase in MRP of liquor, although the actual effect will be realised only after the new retail system as per the excise policy for 2021-22 is in place," said a liquor trader.

Unsplash

In the new Excise Policy 2021-22, the excise duty and VAT have been subsumed in the licence fee. Nominal excise duty and VAT at the rate of 1 per cent each on wholesale price (WSP) will be levied to arrive at the landing price to the retailer, said the order.

The impact on WSP due to incorporation of various factors like central sales tax at 2 per cent, profit margin for wholesale, import pass fee and freight and handling charges, as approved in the Excise Policy 2021-22, will cause 10 per cent to 25 per cent rise for some brands of whisky (Indian manufactured foreign liquor or IMFL), with fluctuation per unit from 8 per cent (Royal Stag Premier) to 25.9 per cent (Blenders Pride Rare).

"Due to revised parameters incorporated in the cost card of Indian and foreign liquor vide new Excise Policy 2021-22, the new WSP to arrive is likely to increase by approximately 8-9 percent," the order said.

Unsplash

A similar impact is expected on ether categories of liquor as well, it pointed out. Under the Excise Policy 2021-22, all the 849 vends will be operated by private entities from November 17.

So far, the majority of retail sale in Delhi was handled by city government agencies that will shut shop on November 16. About 260 private vends were closed on September 30 in view of the implementation of the new excise policy. It would be a reasonable assumption that since all vends shall be operated by private business entities in a competitive market environment, they would operate at their maximum efficiency, and the market size in terms of the number of casks sold is likely to show a significant increase as compared to 2019-20, the order stated.

The Excise Commissioner will fix MRP for each product after taking into account the input of licensees and the price of the product in the neighbouring states of Haryana, Uttar Pradesh, Punjab, and Rajasthan.