New liquor policy to ensure sales at MRP
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The state government has taken several initiatives to ensure sale of liquor at the prescribed Maximum Retail Price in the new Excise policy that finally came out on Monday. The government has decreased the licence fee amount, particularly in urban and semi-urban areas and avoided unhealthy competition, a common feature in open auctions, by deciding to choose the prospective licensee through a draw of lots. It will also be mandatory for the retailer to issue bills for every sale.
For instance, a retailer at a village called Dachepalli in Guntur had paid Rs 3.5 crore as licence fee in an open auction in 2010. In the new policy, the government has fixed the licence fee at Rs 32.5 lakh. “The MRP is violated to recover the exorbitant investments made on the license fee,” a senior excise official said, adding that a rational fee, though reducing the government revenue initially, will help in maintaining the MRP that in turn will ensure increa-sed volumes and revenues.
There were, however, no precautions taken to avoid formation of liquor syndicates and obtaining licences in benami names. “There are high chances of benami applicants and formation of cartels due to the short period available to apply for licences,” sources said, adding that it would be difficult for the new players to search for premises and establish shops in four to five days before the start of new excise year on July 1.
The excise department had not insisted on I-T returns for the last three years nor had it banned white ration card holders from applying for outlets. There is also no bar on syndicate owners who have been booked by the ACB from applying for licenses. The government has asked applicants to give lists of immovable properties, but there is no clause that prohibits people having no assets from obtaining licence through draw.
Contrary to the previous practice, the license is valid for one year only and the decision whether or not to renew will be taken at an “appropriate” time. Though the government has retained the existing 6,596 shops, it has put leverage for the excise department to increase the number in the form of state-owned shops in the event of violation of the MRP.
The department decided to collect a non-refundable application fee of Rs 25,000 and an Earnest Money Deposit of Rs 5 lakh that will be adjusted from the licence fee of the applicants picked through lots. In addition to the license fee, a privilege fee of 8 per cent and applicable rate of value-added tax will be levied for the excess turnover
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