The Delhi Government has increased the Value Added Tax ( VAT ) on Liquor. In the exercise of the power conferred by sub-section (1) of section 103 of Delhi Value Added Tax Act, 2004, Lt. Governor of National Capital Territory of Delhi, made the amendments in the Fourth Schedule appended to the Delhi Value Added Tax Act, 2004.
As per the notification Liquor (Foreign and Indian Made Foreign liquor) for consumption “off” the premises (under Excise Policy, 2021-22, from Wholesaler to retailer w.e.f. 10.11.2021) the VAT has been increased by 01 paise in the rupee.
Further, Liquor (Foreign and Indian Made Foreign liquor) for consumption “off” the premises, by retailer till November 16, 2021, has been increased by 25 paise in the rupee and w.e.f. 17.11.2021 the VAT has increased by 01 paise in the rupee.
In the case of Liquor (Foreign and Indian Made Foreign liquor) for consumption “on” the premises (Hotels, Clubs, and Restaurants) VAT has been increased by 25 paise in the rupee.
The last set of licenses were allotted in September, and all new licensees were asked to begin operations from November 17. The government earned Rs. 8,900 crores through the bidding process. Notably, it was 26.7% higher than the reserved price for the licenses, as reported by Hindustan Times. Under the new Delhi Excise Policy, the government will no longer sell liquor in the city, and the entire segment will be handled by private entities.
The government’s earnings from these vendors do not stop at the license. The government would earn approx Rs. 650 crores from excise duty, import fees, VAT, and other license fees. Apart from that, the government is expecting to earn another Rs. 900 to Rs. 1,000 crore from licensing of new brands, distributor licenses, and more.
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