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Last Updated Monday May 25 2020 02:40 PM IST

Bevco's new booze peg: small tax, large returns

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Premium peg: KSBC wants govt to lower tax to bring in leading global brands Many of the leading global brands refuse to supply to the government agency because they do not want to pay 400 percent tax.

Thiruvananthapuram: The Kerala State Beverages Corporation (Bevco), Kerala’s state-run monopoly alcohol retailer, wants the government to slash tax on luxury brands by half. This will bring liquor prices in the state on a par with tourist destinations such as Goa. The government may be empathetic to the demand as it is expected to boost the tourism sector by ensuring the availability of leading liquor brands to foreign visitors.

Bevco managing director (MD) H. Venketesh had written to the state government to cut tax on pricey brands from 400 to 200 per cent. Such brands are only available in duty-free shops in the state.

Luxury hotel managers had been complaining that they could not entertain their guests from abroad who ask for liquor brands of their choice. Even the Bevco sales outlets receive queries from customers about grander brands.

Bevco now retailed 103 brands through its own stores across the state. Many of the leading global brands refuse to supply to the government agency because they do not want to pay the 400 percent tax. They argue that there would be no takers for their brands if the prices are so high.

The Bevco MD underscores this argument in his report to the government. The authorities admitted that now many of these brands reached Kerala through unauthorized channels. The government could usher in these brands by lowering the tax revenue, thereby tapping the additional source of revenue, they said.

Bevco's liquor sales touched Rs. 12,134 crore last year, while the state government received Rs.10,071 crore from this as tax. Alcohol carried an excise duty of 135 per cent. The sales tax comes was 150 per cent of the basic price and excise duty. A social security cess of 10 percent and health care cess of 5 per cent are also imposed on top of this.

Read: Latest Business news | Kerala urges GST Council to check profiteering by traders

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