The Meghalaya Cabinet on Friday reduced the Value Added Tax (VAT) on various brands of liquor by bringing it down from 40 per cent to 37.5 per cent as well as do away with the 25 per cent lifting charges.
Excise Minister Kyrmen Shylla said that the decision to reduce VAT would not affect the revenue generation, because the volume of sales would increase after the price of liquor has come down.
He said that the revenue from excise during 2019-2020 was Rs 276 crore, and
Rs 269 crore during 2020-2021 till January.
“We hope the revenue will be more in this current financial year, than last year, because we have two months more – February and March,” Shylla said.
On the other hand, Deputy Chief Minister, Prestone Tynsong said that the State will be losing annual revenue to the tune of Rs. 80 to Rs. 85 crores.
On being asked why the Meghalaya government reduced VAT on liquor if the State is losing revenue, the Deputy Chief Minister informed that this was done since Assam drastically reduced the tax on alcohol.
“We are living in a competitive world, be it between one State government and another. In the last budget session of Assam, they reduced it drastically where ultimately the price of liquor has come down and the difference in the cost is not less than Rs. 10 to Rs. 50, so we are bound to reduce it.
Moreover, Tynsong said if the government does not reduce then the turnover will drastically come down.
“As I told you we are in the field of competition ultimately we are bound to reduce the tax on liquor. Assam had recently decided to drop 25 percent cess on alcohol.