A bill to impose additional tax on alcoholic beverages presented in the Assembly
Posted on: 24/Mar/2017 12:01:06 PM
A bill to impose additional taxes on alcoholic beverages to amend the Act was presented in the Legislative Assembly yesterday (Thursday, 23rd March). The state Minister for Commercial taxes K. C. Veeramani presented this bill.
In the state governments of Gujarat, Uttar Pradesh, etc., there is a provision to impose additional taxes in the Value Added Tax Act. However, this provision is not available in the Value Added Tax Act in Tamil Nadu.
The state government has decided to impose an additional tax on alcoholic beverages not exceeding 5 percent and in order to increase the sources of state revenue. This would be effective from 1st April 2016. These details have been presented in the bill.
The revenue department officials explained in this regard that once GST is implemented, the state government can impose taxes only on the fuels and alcoholic beverages. So, a decision was taken to impose additional duty on alcoholic beverages. As per this proposal, TASMAC will need to pay this tax for the sales over the last 1 year. This bill concerns only about imposing additional tax.
Once this bill is passed in the legislative assembly, an official announcement will be released regarding this. The imposed additional tax will be different for alcoholic beverages like whisky and brandy and a different tax rate for the beer varieties.
It is worth noting here that this tax was being collected in the period before the implementation of the Value Added Tax Act. This is brought again.
The annual turnover of TASMAC is over Rs. 30000 Crores. Hence, it may need to pay a tax of over Rs. 1000 Crore every year. As the bill is proposed to be effective with a back date - from 1st April 2016 - TASMAC needs to pay this 1-year tax balance.
Thus, there is scope for the prices of alcoholic beverages to go up again. The state government claims that the VAT on the Petrol and Diesel is minimum only in Tamil Nadu. In this situation, the state government is the only one among the southern states to propose an additional tax on the alcoholic beverages.
The finance department officials shared that the government has imposed the proposed additional tax only on TASMAC. It has still not decided on the issue of imposing an additional tax and the ratio of the additional tax. Once this is decided, TASMAC has to take a decision whether to increase the prices of the alcoholic beverages.
