Suspense crime, Digital Desk : While the Indian Government is looking to implement the ‘One Nation One Poll’ (:ONOP) initiative governance is more or less tackled in a single vision but a fragmented reality poses a challenge. One such challenge is the liquor tax which is unlike any other in the sense that taxes for a single product vary among states. This has spurred the phrase ‘one bottle, many taxes’ which is now more poignant than ever.

Excise Duty Regional Discrepancies

The Times of India has recently published a report about the shortcomings in the liquor industry taxation, highlighting a state based excise duty system which phones in on alcohol’s abuse as a chronic problem.

High Tax:
Karnataka 80%
Telengana 72%
Maharashtra 71%
Uttar pradesh 68%
Rajasthan 64%

Low Tax:
Haryana 43%
Goa 55%

Such discrepancies also lead to price differences. Take, for example the price of a whiskey bottle – it is relatively higher in bangaluru when compared to Panaji and Gurugram.

What sparks these republics for such sheer discrepancies per excise rate?

Dependence on revenue: liquor and fuel are excluded from the Goods and Services Tax (GST) which enables state administrations to rake in some finances through fuel and liquor sales. This explains that counters are free to generate funds via the two, hence why they depend on revenue.

Political resistance to incorporating goods and services tax makes it harder for states to agree on including liquor due to the loss of fiscal freedom

Financial subvention liquor tax revenues are used to fund welfare initiatives and offset spending shortfalls which provide essentialist aid during the current system where state expenditures and entitlements are available for almost everything.

Read More: ‘One Bottle, Many Taxes’: Why Liquor Prices Vary Drastically Across Indian States