This is my tavern, the first propagandist of communism
These lines of Harivansh Rai Bachchan are popping up in the minds of the people of neighboring cities of Delhi these days. They are saying that there is no distinction in the bar, if someone wants to go to his house with 2-3 bottles, then why is he not allowed. A bottle rule has broken the hearts of these neighbors.
then began to swallow more
Have drank a little bit… When discounts started being available in Delhi, people living in NCR started drinking more, not less. But these days they are desperate. They are cursing the rule which has curtailed their right to drink. Pharmacist Ajit Chaudhary has been visiting Bhagirath Palace in Delhi twice a week for a long time in connection with his wholesale medicine business. For two decades, it had become such a routine that whenever he went to Delhi, he would buy whiskey and beer for his drink while coming to Noida. When there was a discount on liquor in Delhi, Chaudhary increased the purchase. But Chaudhary is very disappointed with the new order issued by the Noida Excise Department. Under the new rule, you can only bring an unsealed bottle when crossing the border.
“For many years, I have been buying 2-3 bottles of liquor every month and a box of beer from Delhi,” says Choudhary. This new rule stumps me. I don’t understand what is the problem if I buy liquor here?’
Brother, I stay in Delhi all day. Will there be a storm if I take more than a bottle in the evening on my way home to Noida?
amateurs standing outside a shop in mayur vihar
What is the reason for separate tax?
Actually, like petroleum products, alcohol has also been kept out of the purview of GST at this time. This means that states are completely free to decide on their tax structure on alcohol. Neighboring states like Delhi, Haryana and Uttar Pradesh have different tax rates on liquor. Because of this, liquor is cheaper or more expensive in one state than in another.
Here is the cheapest wine
If we look at the current tax rate, liquor is the cheapest in Haryana, followed by Delhi and then UP. Till last year, a large number of Delhiites, especially those who used to go to Gurgaon for job or work every day, used to buy their stock from wholesale shops while coming from the highway. But in the new excise policy of Delhi, liquor stores were allowed to offer at retail price, so they found it a profitable deal to buy liquor in the capital itself. This increased the sale of liquor in Delhi. People from neighboring states would cross the border and buy cheap liquor to eat and drink. This reduced the revenue of Noida and Ghaziabad. Forced, the Excise Department increased surveillance on the border.
The Excise Act of each state states that no one can bring more than one liter of liquor from a neighboring state. There is a provision for heavy fines, there is also jail for violation. A Delhi Excise official said, “Every year, people have been bringing liquor in large quantities from Haryana and selling it in Delhi, which affects our revenues.” The official said that but the focus has always been on the big target… it is not possible to be so strict. Now Delhi is getting very competitive rates and discounts, so that trend has reversed.
How is this NCR?
People living in Ghaziabad, Noida, Gurugram and other neighboring cities who work in Delhi say the system goes against the concept of the National Capital Region. Praveen Tyagi, who works in an FMCG multinational company, says, “I practically spend the entire day in Delhi and go back to sleep at Raj Nagar Extension house in Ghaziabad. What’s wrong if I buy liquor in Delhi? Usually by the time I reach my home, the liquor stores in Ghaziabad are closed.
NCR should be considered as an economic zone. And the tariff of taxes, transport fares, water and electricity should be the same for all the cities under its purview.
CA Vinita Agarwal
Alcohol and earning math
The tax revenue from the sale of liquor is a major source of income for any state and that is why many states are not willing to bring liquor under the purview of GST. Under the new excise policy, out of the total estimated tax revenue of Rs 47,700 crore to Delhi for 2022-23, 20 percent i.e. more than 9500 crore can be earned from alcohol. Earlier it used to be around 5,000 crores.
In 2021-22, Noida and Ghaziabad together earned an income of 2800 crores from excise, which is 8 percent of the state excise revenue. Gurgaon, Faridabad and other districts of Haryana adjoining Delhi together earn more than Rs 2,000 crore from liquor. It is clear that no state wants to lose this revenue, that is why nowadays strict vigil is being kept on the borders with Delhi.
Interestingly, petroleum dealers are also facing different rate VAT in Delhi, Haryana and UP. If VAT on fuel, especially diesel, increases in Delhi or decreases in neighboring states, the sales at petrol pumps within 3-4 km radius of the border suddenly drop. A dealer said that due to higher tax, Delhi’s VAT revenue increases but some petroleum dealers suffer losses.
Rules for carrying liquor from one state to another
Limit – 1 liter
Penalty- Vehicle confiscated, imprisonment up to three years or final limit up to 3 lakh – 1 liter, unsealed
Penalty – Car seized, jailed for 3 years, 10 times the final limit of excise duty – 1 liter
Penalty – One year jail, 1 lakh minimum fine