Maharashtra government has announced a hike in the Value Added Tax (VAT) on liquor in restaurants, bars, lounges, cafes and clubs.
Reports stated that the VAT rate for permit room liquor services will now be 10 per cent, up from the previous 5 per cent.
This rise in the cost of liquor will be imposed from November 1. However, it is pertinent to note that this move will not impact the prices for over-the-counter sales at wine shops.
Moreover, liquor services in star hotels won't experience a tax increase as they already pay a higher VAT rate, currently set at 20 per cent.
This decision may lead to reduced beer prices but is primarily aimed at boosting revenue. However, specific details and the timeline for the proposed policy are still under discussion, as per excise department officials, the report added.
As per reports, last month, the Goods and Services Tax (GST) department in Mumbai had proposed a hike in the tax on liquor served in restaurants and hotels below 3 stars. The tax was suggested to be implemented in restaurants and hotels below 3 stars, from 5% to 10-15%. The move would help the government in increasing the revenue by ₹300 to ₹600 crore annually.
Furthermore, the government is considering implementing a new excise policy that links pricing to the alcohol content of beverages and permits the sale of bottled liquors in bars and permit rooms, reports FPJ.
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