Prices of beer, wine hiked in state

Hyderabad: Prices of beer, wines and ready-to-drink liquors with low alcohol presence was increased by Rs 5 to Rs 15 on Thursday with the state government adjusting the Value Added Tax (VAT) and excise duty on liquor.
The price of strong beer was increased from Rs 85 per bottle to Rs 95 and lager from Rs 75 to Rs 85. However, the prices of cheap and middle segment liquors which constitute 97 per cent of the market share have remained the same while high-end liquor has become costlier by Rs 15 per bottle. The MRP of wine in the existing category of Rs 55 per bottle has been increased to Rs 60, bottles for Rs 70 has become Rs 80 and Rs 75 was enhanced to Rs 90. The price of ready-to-drink liquors has been increased from Rs 55 to Rs 65.
The MRP of hard spirits was enhanced in the Rs 55 per bottle category to Rs 60, Rs 130 to Rs 135, Rs 140 to Rs 145 and Rs 210 to Rs 225.
Principal secretary of revenue, Mr Asutosh Mishra, who issued the orders on Wednesday, said that the adjustments had been made to simplify the procedure of levying tax and duties.
Sources, however, told this newspaper that the main purpose of the exercise was to avoid income-tax on revenue earned by the state through AP Beverages Corporation, the wholesale supplier.
The state and I-T department have been at loggerheads over the definition of trade margin with the latter slapping tax on the margin treating it as income. The government, however, was arguing that the entire revenue was remitted to Treasury and the corporation was only an arrangement to exercise control over the supply of liquor in the state.
The government will get an additional revenue of Rs 600 crore on beer alone and the total increase in the revenue because of the adjustments will be around Rs 800 crore.
Sources said the adjustments were made in such a way that majority of the income earned from sale of liquor would now be shown under taxes and duties which do not attract IT.