High Corona Tax Takes Bite Of Economic Corona Vaccine

The cost of containing the Corona virus seems to have fallen on the liquor industry. With the loss of jobs If the demand tapers in the medium term

Standalone liquor shops in India reopened after nearly six weeks of lockdown, but no one expected that they would be the engine of India’s economic revival. Excise duty on alcohol makes up a third of any state’s tax revenues — for states such as Karnataka, West Bengal and Uttar Pradesh, the income from alcohol is even higher.

India became the first to fund Corona with 70 % Alcohol Tax. The Delhi Government set the ball rolling by imposing a special tax of 70% on retail liquor purchases to deter large gatherings at stores as officials eased a six-week lockdown imposed to slow the spread of the Coronavirus

Taxes on alcohol are a key contributor to the revenue of many of India’s 36 states and federal territories, most of which are running short of funds because of the lengthy disruption in economic activity caused by the virus.

Andhra Pradesh soon followed suit and hiked the price of alcohol by 75% through an increase in excise duty. In West Bengal, the price was increased by 30% while in Rajasthan, alcohol became pricier by 10%.

When some Indian cities eased the grinding lockdown recently to prevent the spread of the novel Coronavirus, long queues were seen outside liquor shops across the country.

Madhya Pradesh will impose Corona tax on sale of liquor in the state to mop up additional revenues for the state. The resource-starved MP government has suffered loss of revenue to the tune of ₹1800 crore following the nationwide lockdown clamped in the wake of Coronavirus outbreak, on March 24.