Eat, trade, but no dancing in the bar ,Cigarettes, liquor to cost more

THERE’S bad news for smokers, tipplers and tobacco chewers in the state. The Maharashtra Budget tabled on Thursday has levied a 12.5% value added tax on tobacco. However, bidis have been spared the tax. From April 1 this year, prices of all tobacco products, except bidis, will go up by 12.5%. “To enable states levy VAT on tobacco and tobacco products, a bill proposing amendments to the Additional Duties Excise Act as well as Central Sales Tax Act has been passed by Parliament,” state finance minister Jayant Patil said before announcing the Budget. The move to keep the bidi out of the tax net may have been driven by the fact that a senior NCP leader — the party Mr Patil belongs to — is one of the country’s big bidi players. Mr Patil rejected the insinuation that bidi was left out of the tax net because of political compulsions. “Normally poor people smoke bidi, and hence the tax concession,” he justified. However, a similar concession has not been granted to country liquor, largely consumed by the poor. Mr Patil’s budget has changed the ratio of manufacturing cost to MRP levied on all alcoholic beverages. The rate of minimum excise duty on country liquor is Rs 55/proof litre, and will rise to Rs 60/proof litre from April 1. In the case of IMFL, the MRP is related to manufacturing cost. At present, if the manufacturing cost is Rs 88 or less per litre, the MRP has been capped at four times the manufacturing cost. Mr Patil has raised the limit to Rs 92/litre or less. For fermented beer, the excise duty is equal to the manufacturing cost while the MRP is 3.5 times the manufacturing cost. Mr Patil has left the MRP for beer untouched, while raising the excise duty to 1.25 times the manufacturing cost.

Courtesy: EconomicTimes
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