Liquor sales in Bengal are on a decline despite the government opening up the retail trade and allowing online purchases. The industry is lobbying the government to bring down the 30 per cent sales tax imposed in April to shore up revenue.

Bengal is among the five states besides Delhi, Andhra Pradesh, Rajasthan and Odisha that had gone for a steep hike in liquor duty in the last four months, making it expensive for the tipplers.

The hike has also led to a shift in the purchase pattern with consumers preferring lowpriced alternatives, affecting the volume of Indianmade foreign liquor (IMFL).

The Confederation of Indian Alcoholic Beverage Companies (CIABC) that comprises manufacturers such as Allied Blenders & Distillers, Amrut Distilleries, Mohan Meakin and Radico Khaitan has estimated a 29 per cent drop in sales in March followed by an 84 per cent drop in April and a 35 per cent drop in May when the business resumed with the opening up of retail stores.

The industry association said the sharp rise in levy has pushed the price of IMFL in the state, making it expensive compared with the neighbouring states of Assam and Jharkhand, raising concerns of illicit liquor coming into the state.

The association has urged the government to bring down the sales tax on liquor to a level of not more than 510 per cent to prevent a downward spiral in sales.

“What we have seen in the other states is that if there is an increase of around 10 per cent, there is no real impact on the volume and revenues also go up. If it’s more, volume starts coming down and the net tax collection is affected,” said Vinod Giri, the director general of the CIABC.

He said the association has brought to the notice of the state government the instance of the Delhi government which had imposed a 70 per cent cess on liquor. The move drastically brought down liquor sales and the government had to later replace it with a 5 per cent VAT.

“At the same time Haryana and Uttar Pradesh that had imposed moderate tax increases had managed to contain the decline,” Giri said.

He also said that Bengal has a porous border with the neighbouring states and the price increase in those states were much less compared to Bengal.

As a result the difference in prices which already existed have now widened and there is an industry apprehension that it will lead to a large scale unlawful smuggling of liquor affecting genuine sales and government revenue.

For instance, the price gap of a branded 180 ml bottle of an IMFL with Assam has increased from Rs 75 to Rs 105 and that of Jharkhand has increased from Rs 30 to Rs 60 after the imposition of the 30 per cent levy.

“We hope that the government takes note of the situation and considers our request for the benefit of all stakeholders,” he said.