Purse of Puducherry tipplers to turn thin soon

PUDUCHERRY: The  price of liquor in the Union Territory, considered a  tipplers paradise, is likely to go up with the government all set to revise Additional Excise Duty (AED) on liquor (both IMFL and beer) for enhancing revenue to support the budgetary expenditure .The Puducherry Excise (amendment) bill, 2011 passed in the Legislative assembly  on Thursday is indicative of such a measure. When K Lakshminarayanan (Cong) questioned the government on the bill and wanted the purpose to be made clear, citing  Central government’s  withdrawal of  discretionary powers of ministers, Chief minister N Rangasamy replied that it was being done to enhance the revenue.As per the budget presented in the assembly, the government had set a target to raise excise revenue of Rs. 710 crore in the current year from Rs. 380 crore in the previous financial year. So far no fresh taxes or enhancement of taxes has been announced in the budget. This targeted doubling of revenue was questioned by Leader of opposition V Vaithilingam and MLA E Valsaraj in the Assembly. They predicted that there would be fresh taxes after the budget. The Chief minister, however, maintained a silence with the model code of conduct coming to his aid. Now the government is contemplating to raise at least Rs. 100 crore through enhancement of AED. At present the AED is 35 per cent and is expected to be raised to around 50 per cent.  Through the amendment of the Excise Act, the government will have powers to give retrospective as well prospective effect to new rules and notifications made under the Act.Even there is a proposal to reintroduce VAT on liquor by the commercial taxes department;  the price would still be kept lower than neighbouring states. This is because the revenue comes from tourists from neighbouring states.If the price is enhanced, the volume of consumption could fall and  revenue realisation will not be a reality. Moreover, the government would have to keep a close watch on sale of liquor above the MRP. Otherwise the purpose would be defeated.