Goa Government’s decision last month to become WTO-compliant by resorting to MRP-system for liquor taxation coupled with a major exercise to simplify the licensing procedure and reduce the license fees for different categories of liquor licenses for retail outlets in State’s budget this year has paid rich dividends.
Senior officials in State Finance Department have reportedly told Business Line that there is buoyancy in the excise collections even ahead of the main tourist season with the hotels, resorts and restaurants in different categories across the State benefitting the most.
The hospitality industry in the State had been earlier agitated over the VAT regime which hurt them as taxation of liquor served in the hotels and restaurants had hit their profit-margins.
“Measures initiated for simplification of the excise tax system and reduction in rates of taxation and licensing; all aimed at voluntary compliance and consequently reducing the scope for corruption, are helping Goa Excise increase its revenues this year,” said a top official of the Finance Ministry.
Against last year’s excise collection of Rs. 880 million, substantial increase is expected by the State-at least 10% extra recovery is being expected. The Government had reduced license processing fees for the retail sale of foreign liquor at hotels and other outlets drastically.
The Government reduced the license processing fees of foreign liquor for consumption on premises as well as in packed bottles from the existing Rs 20,000 to Rs 2,000; drastically reduced license fee for retail sale of foreign liquor for ‘B’ category hotels from Rs 100,000 to Rs 25,000; reduced license fee from Rs 5,000 to Rs 2,500 for ‘A’ class municipalities and coastal villages, from Rs 3,000 to Rs 1,500 in towns and cities other than ‘A’ class municipalities in coastal areas and from Rs 1,500 to Rs 1,000 in villages other than coastal areas, according to the report.
The Excise department also reduced license fee from Rs 75,000 to Rs 20,000 for bars and restaurants having late night additional timings and from Rs 90,000 to Rs 7,000 for beach-shacks (beach-side temporary eateries set up during tourist season) keeping open the liquor service late night hours.
One of the new applicants for the upgraded license for imported wine and liquor is the relatively new but extremely popular Beleza Resort in South Goa. Bhavna Bahl who manages the family-owned resort has been keen to stock imported wines and liquor as their guests request it regularly,’ but our business did not justify the payment of Rs. 100,000 a year for the license to stock imported wines. But the reduction has made it possible for us to apply for the license and offer them now. We have already started negotiations with suppliers and will soon have the license and consequently the wines for our restaurant.’
Vendors for imported wines and spirits have stepped up their efforts too. Sumit Sehgal, national manager of Prestige Wines which are importers of Torres, Picini and other wines and spirits says,’ we have entered the market and are optimistic about a quantum jump in our sales. In fact, we have provided a full range of our wines and hope to get good business from hotels as well as retail since our prices are very reasonable'.
As direct fallout of the drastic reduction in license fees, so far 140 applicants had sought licenses for the retail sale of foreign liquor while, 75 bars and restaurant owners extended their timings, the sources said adding that this had helped them to do business freely. In the earlier years, the tendency was to avoid seeking licenses and resorting to malpractices, concludes the news report.
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