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Haryana’s new excise policy set to spoil booze party


The state government’s new excise policy is bad news for many small and medium-sized entrepreneurs, especially those who run pubs, bars and restaurants, as it’s set to make booze dearer by 20%.

According to Gurugram’s pub owners, the increase might lead to many small-time businesses folding, as they won’t be able to sustain costs. “The food and beverages market is a.lready struggling with intense competition and high rentals. I don’t think I can sustain long after recent policy changes. I plan to shut down my place on April 1,” said Sandy Verma, owner, Sandys Cocktails & Kitchen, Sector 29. He added such taxation will only kill small businesses. “Haryana is the only state where we don’t get a rebate on inputs against VAT, which makes liquor dearer,” said Verma.

While not everyone in the industry is as pessimistic, almost every industry insider agreed not only will the new policy hit business, especially restaurants and pubs, hard, it will also bring down government revenue. “The consumer can easily buy from Delhi. Such high increase will deter customers to party in Gurugram. Apart from lower business for restaurants, it will also lead to lesser revenues,” said Pawan Soni, co-owner at Prankster, Sector 29.

Under the new policy, patrons within the Gurugram and Faridabad excise zones will have to pay more for drinking in pubs and bars, as licence fee for such establishments has been raised from Rs 12 lakh to 15 lakh per annum. Though most pub owners said they would avoid passing the cost to customers, it seems inevitable. Anyway, licence fee can’t be passed on to the customer, but they will have to bear with the increase in VAT.

“The rise in licence fee comes to a steep Rs 25,000 a month. To cover that kind of cost, an outlet will need additional Rs 4,000 business a day, which is very difficult,” said Zoravar Kalra, founder of Massive Restaurants, which includes Farzi Cafe. He added a single vendor for international liquor is another bad decision, as it would create a monopoly, besides affecting supply.

Haryana though still charges less tax on liquor than Delhi. “Though the increase will impact prices and demand, Haryana’s taxation is still lower than Delhi’s,” said Joy Singh, partner at Raasta Cafe.

Customers are worried. “We already pay such steep taxes. A Rs 800 bill comes to almost Rs 1,400-1,500 after taxes. Another increase will take away the joy of going out,” said Ankita Singh, a marketing professional.

Source: Times of India

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