Liquor prices in Delhi may rise as new excise policy comes into effect in November

The impact of an increase in WSP and prices of liquor in neighbouring states including Haryana, UP, Punjab and Rajasthan will also be taken into account while fixing MRP, the order said.

Prices of liquor in Delhi are likely to increase as the new excise policy comes into effect from November. As per an order from the Excise, Entertainment and Luxury Tax, the wholesale price (WSP) per unit may increase between 8-9 per cent depending upon the type of liquor. Government officials are in the process of fixing the Maximum Retail Price (MRP) in view of the changed Excise Policy.

“Due to revised parameters incorporated in the cost card of Indian and foreign liquor vide new Excise Policy 2021-22, the new WSP to be arrived is likely to increase by approximately 8-9 per cent,” the order said.

As per officials, in the new policy, excise duty and VAT have been subsumed in the licence fee. A nominal excise duty and VAT at the rate of 1 per cent each on wholesale price (WSP) will be levied at the landing price to the retailer, said the order.

The impact on WSP due to incorporation of various factors like central sales tax among others will increase the price of whiskey in the range of Rs 10 per wholesale unit for McDowell to Rs 25 per unit for Blenders Pride. A similar impact is expected on other categories of liquor as well, the order said.

As per the new policy, all 849 vends will be operated by private entities from November 17.

“It would be a reasonable assumption that since all vends shall be operated by private business entities in a competitive market environment, they would operate at their maximum efficiency and the market size in terms of number of casks sold is likely to show a significant increase as compared to 2019-20,” the order further said.

There will be no capping of Rs 50 as retail margin on the sale of IMFL (Indian-Made Foreign Liquor) and Rs 100 on sale of foreign liquor, read the order. There will be no cap on the retail margin of IMFL, foreign liquor, beer and wine and the competitive market forces will keep watch over the sale price to the consumer, the order said.

“It is important that the consumer should not be burdened with price increase. The changes brought about in the new excise policy will need reasonable time to play out in the market. In the overall interests of consumers of Delhi, to prevent interstate smuggling, the MRP for 2021-22 should as far as possible be in the same range as prevailing in Delhi,” the order stated.

The impact of an increase in WSP and prices of liquor in neighbouring states including Haryana, UP, Punjab and Rajasthan will also be taken into account while fixing MRP, the order said.

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