While Removing Duty on Canned Beer, Excise Duty on Liquor Revised

Budget 2018 includes several proposals concerning the Excise Duties imposed on liquor, canned beer, non-potable alcohol and raw material used for manufacturing of ethanol. Accordingly, Excise Duty will be introduced based on volume depending on the type of liquor as follows:

Hard liquor – Rs. 3,300 per litre
Beer – Rs.2,400 per litre
Wine – Rs.2,400 per litre

An excise duty will be imposed on the import of non-potable alcohol at Rs.15 per Kg.Excise Duty will be also imposed on raw materials used for manufacturing of ethanol.A proposed duty of Rs.05 will be imposed per litre of Toddy while Rs.10 will be imposed per Kg on Molasses/Maize/Rice/Fruits.    The Excise (Special Provisions) Duty applicable on canned beer will be removed, the report said. With effect from January 01, 2018 the rate structure of Liquor license fee will be simplified.The issuance of new liquor license will be simplified to promote tourism, it said.
Changes to Excise Duty will be Gazetted.

Delivering the budget speech, the minister had said that out of the total liquor consumption, almost 49% is from illicit sources while 85% consume hard liquor.  “However, in most countries, the tax structure is designed to discourage the consumption of hard liquor and is often proportionate to the alcohol content. We will rationalize the tax structure based on a formula linked to the alcohol content and type,” Mangala said.

Further, he added that NBT will be imposed on liquor with effect from April 01, 2018. The minister also announced a Sugar tax on sweetened beverages. Excise duty based on the quantum of sugar contained will be introduced for the beverages with added sugar.  This duty is applicable for beverages classified under HS Code 22.02. The rate will be 50 cts per gram of sugar.