Drinking a beer in Maharashtra just became more expensive. The state government, on Monday, increased the excise duty on mild and strong beer by 25% and 35%. The last time the duty on beer was hiked was in 2013.
The average price of a pint (330ml) of mild beer will not go up by Rs 3 and the price of a pint of strong beer has risen by Rs 4.5. A full bottle (650ml) will cost you Rs 5 for mild beer and Rs 6.5 for strong beer.
The Fadnavis government expects the duty hike to bring it an additional Rs 150-Rs 175 crore and hope the move would help the state raise additional revenues following the move to write off farm loans.
The exact rise for each brand will be known in a day or so, said industry sources. “Beer prices differ from brand to brand. The figures (cited above) are averages based on back-of-the-envelope calculations,” said a source. The cost of a pint of brands such as Kingfisher, Carlsberg and Budweiser is in the range of Rs 60-110. That of a full bottle for the same is in the range of Rs 110-230.Excise duty on beer is calculated on the manufacturing cost. The selling price, or MRP, is derived after adding VAT, which is 35% in the state.
“Earlier, 150% of the manufacturing cost or Rs 33 per bulk litre, whichever is higher, was the formula for imposing excise duty on mild beer. This has been changed to 175% of the manufacturing cost or Rs 42 per bulk litre, whichever is higher,” said an excise official. For strong beer, the previous excise formula was 200% of the manufacturing cost or Rs 60 per bulk litre, which has now been changed to 235 % of manufacturing cost or Rs 80 per bulk litre, the official said.
The excise hikes on beer will increase the annual revenue of the excise department by just Rs 150 crore. The annual sale of beer in Maharashtra is around 33 crore liters. The department’s revenue in the last fiscal was Rs 12,288 crore, which is targeted at Rs 14,000 crore this financial year.
Interestingly, there is no excise duty on wine for the simple reason that the country’s wine industry is largely concentrated in the Nashik to Northern Maharashtra belt and so the state aims at promoting wine brands. Maharashtra contributes around 80% to India’s wine consumption. The remaining 20% contribution is of Karnataka, Andhra Pradesh, Tamil Nadu, Punjab and other states.
