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Puducherry’s excise duty crosses ₹1,000-crore mark for first time

The huge spike has been attributed to the revival of economic activity and the introduction of special excise duty of 20% in July
The department collected ₹1,063 crore, exceeding the government’s 2021-22 target of ₹1,032 crore. |

In a major relief to the cash-strapped Union Territory, excise duty collection has reported a huge buoyancy in the financial year ended March 31, with the government’s revenue from sale of liquor and arrack touching the ₹1,000-crore mark for the first time and exceeding the Excise Department’s own target set for the fiscal.

While the Puducherry government had set a target of ₹1,032 crore for excise duty collection in 2021-22, the department netted a revenue of ₹1,063 crore, ₹297 crore more than what was collected in 2020-21. In 2020-21, the government netted a revenue of ₹766 crore, and in the year before, it reported a tax revenue of ₹857 crore. The excise duty collected during 2018-19 was ₹850 crore, ₹789 crore in 2017-18 and ₹671 crore in 2016-17, data available with government revealed.

The huge spike in revenue collection in 2021-22, despite a 60 day lockdown in May-June, has been attributed to the revival of economic activity in the latter part of the fiscal and introduction of special excise duty of 20% in July.

Of the total revenue of ₹1,063 crore from the excise duty, the department had mopped up ₹778 crore through the sale of Indian Made Foreign Liquor (IMFL), ₹151 crore from beer, ₹63 crore from arrack kist (rental), ₹60. 5 crore from renewal and brand label registrations, ₹1.22 crore as penalties and ₹6.5 crore as other charges.

“For the first time, we have crossed the ₹1,000-crore mark. We have witnessed this record collection despite the lockdown in May-June and subsequent restrictions. There has been a revival in economic activity. The increase could also be attributed to the levy of special excise duty of 20%, online monitoring of tax evasion and continuous inspection to check the sale of spurious liquor,” Deputy Commissioner (Excise) T. Sudhakar told The Hindu.

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Regular checking in IMFL outlets was a crucial factor in preventing tax evasion by way of sale of spurious liquor as the department collected the duty before the sale, he added.

“The increase in excise duty collection gives more scope for duty restructuring to fetch more revenue since excise duty is the second main revenue generator for the Union Territory after commercial tax. It gives planners more elbow room for internal tax mobilisation,” Mr. Sudhakar said.

In 2021-22, the government had projected a total outlay of ₹9,924.41 crore, of which Puducherry’s own revenue receipts were estimated at ₹6,190 crore. Now, with the available trend, the government could set a target of ₹1,300 crore to ₹1,400 crore in the current financial year from excise duty. “Going by the trend available in last five years, the target can be achieved,” he added.

With the aim to generate more income from excise duty, the government had tweaked the Puducherry Excise Rules, 1970 for grant of microbrewery licence. The fee for grant of licence had been fixed at ₹2 lakh per year and enabled the department to collect 50% of the annual production capacity in advance.

“We have issued one licence and in-principle agreement has been given to two ventures for microbreweries. There is also a great demand for licence for tourism category hotels serving liquor. We have already issued licence for 110 such ventures, and this is a potential area where we could tap more resources,” Mr. Sudhakar said.

He added that a joint WhatsApp group of excise officials in Puducherry and neighbouring districts of Tamil Nadu would be set up to share details on manufacture and sale of spurious liquor.

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The above news was originally posted on www.thehindu.com

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