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Push for microbreweries, end of monopoly in excise policy



GURUGRAM: The new excise policy in Haryana announced on Tuesday encourages the already thriving business of microbreweries, one of the major attractions in Gurugram. In order to promote consumption of mild liquor, the state government has allowed microbreweries to opt for licences without seeking a mandatory licence for hard liquor.

The new policy will also end the monopoly of a single vendor over the supply of imported foreign liquor (IFL). In place of giving licence to the single highest bidder, the excise department will now issue licences to four vendors at a fixed (licence) fee to the wholesaler of IFL. However, it is unlikely that the move will reduce the price of liquor with increased competition, as the state has hiked up the licence fee across the board.
Push for microbreweries, end of monopoly in excise policy
The excise policy of last year had given licence to the single highest bidder to supply IFL in the state. The move was opposed by retailers, restaurateurs and bar owners on the grounds that with just one wholesaler in the state, a monopolistic economy was being created resulting in a possible 50% hike in IFL prices and non-availability of certain brands. They had moved the high court and the Supreme Court against the policy.

The excise policy has now mandated four wholesalers for IFL in 2019-20. The policy will come into effect on April 1. Last year, the single highest bidder (Rs 20 crore) had got the wholesaler licence for IFL. Now, four wholesalers will pay a fixed licence fee of Rs 16 crore per annum each. Along with this, the state has increased licence fee, brand label fee, excise duty and permit fee among other categories and it will make all products more expensive at all retail outlets and restaurants.

Gurugram residents will have to pay little extra for drinking in pubs and bars as the excise policy has now increased the licence fee for restaurants (with liquor facilities) from Rs 15 lakh to 18 lakh per annum, making it the highest in NCR and the whole of north India.

The state has made no changes in bar closing timings (midnight). In Delhi, the closing time is 1am. For opening outlets for an extra hour after midnight, owners will have to pay an additional annual fee of Rs 10 lakh. “This is not affordable as it is not in tune with customer demand,” said a pub owner.

Rahul Singh, head, National Restaurants Association of India (NRAI), Haryana chapter, welcomed the move to end the monopoly of IFL wholesale but had reservations about the hike in fee and tax. “The annual excise licence fee for restaurants in Haryana is the highest among the north Indian states and instead of rationalising it, there has been an increase in the fee. Input of VAT credit on liquor is not permissible in the state and denial of GST input tax credit on non-liquor results in tax on tax for consumers, thereby ripping their pockets,” said Singh.

The state has now allowed Tetra Pak for 180 ml of Indian Made Foreign Liquor (IMFL).

The excise policy has fixed the minimum selling price of liquor. But there is no cap on the maximum price and due to that, liquor prices vary from one outlet to another. “The concept of not standardising the retail price gives a free hand to vendors, and the state has the most expensive pricing in India across multiple categories,” said Singh.

It has ensured that there are no “dry evenings” even on “dry days”. Republic Day and Independence Day will be “dry days” but there will not be “dry evenings” as licenced shops will open after 5 pm on those days.

With the new policy, the state has allowed high-end liquor shops to be set up inside malls where customers can walk in and pick up want they want directly from the shelves.

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