The proposal to hike value-added tax (VAT) on liquor in the UT might have been shot down once but with Himachal Pradesh (HP) endorsing what the Punjab Liquor Lobby has been saying for long, the next excise policy - to be drafted in January - may make liquor in Chandigarh somewhat costlier.
It would anyway not be an easy task as despite the excise and taxation departments of HP and Punjab recently writing to UT to rationalize its excise policy - by hiking VAT from 4 to 12.5% to stop inter-state smuggling - a section of the UT top brass still believes that it is not for Chandigarh to find solutions to the problem of illegal liquor sale in other states.
''The excise policy depends on a host of factors and the percentage of tax is only one of these. UT has to look at the broader picture before taking any decision. It remains to be seen if the excise and taxation department puts up a proposal in this regard,'' said a senior UT official.
A futile attempt to increase VAT on liquor from 4 to 12.5% was made earlier this year but it sparked off a controversy as the then excise and taxation commissioner Roshan Sunkaria put up the proposal straight to the UT administration without referring it to finance secretary Sanjay Kumar.
Later, when the finance department was asked to furnish a report on the issue, it ruled out any increase in VAT on the ground that the excise policy had already been notified for the year and this would amount to breach of contract. The report added that though UT can do so in extraordinary circumstances, there was no such pressing need.
The document presented by the excise departments of neighbouring states point out that in 2007-08 Chandigarh sold a quota of about 85 lakh proof litres (PL) of Indian Made Foreign Liquor (IMFL). Chandigarh has a population of 4 lakh and per person consumption per annum of IMFL is 21.31 PL, whereas Himachal, with a population of 60 lakh, has an annual per person consumption of 1.08 PL. For Punjab and Haryana, it is 1.17 PL and 1.06 PL, respectively.
A senior UT official, however, questioned the pressure on UT to change its policy when Haryana charges no VAT on liquor. An official said no decision had been taken on the issue as yet but a change in percentage of VAT would definitely be examined.Punjab 'liquor lobby' has been saying for long, the next excise policy - to be drafted in January - may make liquor in Chandigarh somewhat costlier.
It would anyway not be an easy task as despite the excise and taxation departments of HP and Punjab recently writing to UT to rationalize its excise policy - by hiking VAT from 4 to 12.5% to stop inter-state smuggling - a section of the UT top brass still believes that it is not for Chandigarh to find solutions to the problem of illegal liquor sale in other states.
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