Foreign liquor shop owners in the city downed shutters on Thursday.

They were protesting the state government's decision to impose 50 per cent value added tax (VAT) at every point of sale on imported liquor and Indian made foreign liquor (IMFL) whose ex-distillery price is more than Rs 845 per case.

A case contains 12 liquor bottles of 750ml, 24 bottles of 375ml and 48 bottles of 180ml.

'We have closed our foreign liquor shops to protest against the commercial taxes department's notification, dated January 22, 2015, according to which 50 per cent of VAT would be levied on every point of sale (i.e. at three stages) on foreign or imported liquor whose ex-distillery price is more than Rs 845 per case. The notification should be withdrawn immediately as it would not only adversely affect our business but would also lead to revenue loss in the long run,' said Patna district foreign liquor retailers' association president Nawal Kishore Singh.

'Earlier, the department used to charge one-time 50 per cent VAT on the sale of foreign liquor but now liquor costing over Rs 845 per case would be charged thrice at the rate of 50 per cent,' Singh said, adding that the move would not only make the consumption of liquor in the state costlier but also promote its illegal sale.

Against the earlier norm of liquor companies charging 50 per cent VAT at the time of sale of liquor to Bihar State Beverages Corporation Ltd (BSBCL) which is the sole distributor in the state, the company would charge 50 per cent of VAT from BSBCL, next BSBCL would charge 50 per cent from retailers and finally retailers would levy 50 per cent tax on the customers, said the association president.

On January 20, the state cabinet approved the department's proposal to charge 50 per cent of tax at every point of sale. The move would fetch around Rs 300 crore annually for the commercial taxes department.

'The government has come out with a new notification without repealing its earlier 2007 notification under the excise policy of 2006, which talks about imposition of VAT at the first (single) point of sale,' said Singh, while making no bones in saying that the association would challenge the new notification in high court asking how a government could bring in a notification without repealing the earlier one.'

'We have asked the government to withdraw it, else, it would be difficult for us to take part in the settlement of foreign liquor shops in the 2015-16 financial year, as it would be difficult to run the shops under the new norms. Shop owners of other districts, too, are gearing up for a statewide bandh,' he said, adding that the government could have at best increased and imposed one-time 60 per cent tax but 50 per cent in three stages is illegal.

Regular brands like Bagpiper's Gold Ribbon, Old Tavern and 8PM whisky, will not become costlier as against premium whisky brands such as McDowell's No. 1, Royal Stag, Blender's Pride, Signature, Black Dog, 100 Pipers and Teachers.