NEW DELHI: In a testament to robust liquor sales, the Delhi government’s revenue saw a substantial boost of nearly Rs 3,588 crore during the first half of the 2023-24 fiscal year. This surge indicates the potential for record-breaking collections in the current financial year.

Excise revenue increases
Source: TOI

In a remarkable demonstration of the buoyant liquor market, the coffers of the Delhi government swelled by nearly Rs 3,588 crore during the first half of the 2023-24 fiscal year, signifying the possibility of achieving record-breaking revenue collection for the ongoing financial year.

Liquor Sales Drive Fiscal Growth

Between April 1 and September 30 of this year, the Delhi government recorded impressive figures with Rs 2,457 crore collected as excise duty and an additional Rs 1,131 crore through value-added tax, all attributed to the sale of 27.6 crore liquor bottles. Although comparisons with the previous fiscal year are challenging due to differences in excise policies and a mid-season transition, it’s worth noting that in the 2022-23 fiscal year, the Delhi government raked in a substantial Rs 6,821 crore from the sale of over 62 crore liquor bottles. It is important to underline that the prior fiscal year included the implementation of the new liquor policy, which was effective until August 31. This policy shift must be distinguished from the current regime, often referred to as the old excise regime, where revenue is generated primarily through excise duty, in contrast to the previous system, which relied on license fees.

Impact of Pandemic-Induced Restrictions

Historically, the initial six months of the 2020-21 and 2021-22 fiscal years witnessed lukewarm liquor sales due to COVID-induced restrictions. These measures led to the temporary closure of shops, hotels, clubs, and restaurants for several months. Despite these challenging circumstances, the Delhi government managed to accumulate a respectable Rs 6,762 crore from excise and VAT on liquor sales in the 2021-22 fiscal year.

Key Players in Liquor Retail

The liquor retail landscape in Delhi is significantly shaped by four government corporations: Delhi State Industrial and Infrastructure Development Corporation, Delhi Tourism and Transportation Development Corporation, Delhi State Civil Supplies Corporation, and Delhi Consumers’ Cooperative Wholesale Stores. Collectively, these entities operate close to 634 liquor shops, including 50 premium stores, within the capital. Additionally, more than 930 hotels, clubs, and restaurants serve liquor, contributing to the overall liquor economy in the city.

Fiscal Year 2023-24 Projections

The Delhi government’s budget for the 2023-24 fiscal year anticipates a total state excise collection of Rs 7,365 crore, constituting nearly 14 percent of the Rs 53,565 crore in tax revenue for the fiscal year. Officials underscore the fact that the initial two quarters of a financial year typically witness lower revenue, compared to the third and fourth quarters. With the festive season just around the corner, officials expect an upswing in liquor sales, resulting in increased revenue from both excise duty and value-added tax.

Seasonal Variations in Liquor Sales

Officials point out a distinct seasonal pattern in liquor sales. During the summer months, beer, which carries relatively lower excise duty, tends to outsell spirits. This trend accounts for the comparatively lower revenue collection during the first half of the financial year, while whiskey sales traditionally surge in the second half.

With the positive revenue trends, the Delhi government is poised for a potentially historic fiscal year, driven by the thriving liquor industry.

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