Liquor dealers in Goa are facing a new issue after the state commercial taxes department decided to tax discounts and incentives they receive from suppliers. According to the Goa Chamber of Commerce & Industry (GCCI), this amounts to double taxation because taxes were already paid when the alcohol was purchased.
The GCCI’s taxation committee has raised concerns with the Goa state commercial taxes commissioner, questioning both the imposition of this new tax and the interest charges on it. They have urged the government to amend the state’s VAT (Value Added Tax) law to address the issue.
Chartered accountant Rohan Bhandare explained that suppliers often offer incentives or discounts, such as cash discounts, for sales promotions. However, the tax department views these incentives as taxable income for the liquor dealers and has reversed the input tax credits they had previously claimed.
This has led to increased tax burdens on liquor retailers, as the 22% tax and additional interest charges are now being imposed on them. Since suppliers are not collecting this tax, it falls entirely on the dealers, which could negatively impact their financial health.
Many liquor dealers are challenging these cases in court, including at the high court level. Bhandare emphasized that the fact that so many cases are being contested suggests there is significant unfairness in this decision and urged the government to step in and provide clarification.
