Thiruvananthapuram: The Kerala government has turned down requests from breweries seeking exemption from the turnover tax (ToT). The plea was made by United Breweries Limited, KALS Breweries Pvt Ltd, and the Brewers Association of India between 2023 and 2024.
In its response, the state’s Tax Department clarified that the exemption is applicable only to distilleries that sell their liquor directly to the Kerala State Beverages Corporation (KSBC).
The exemption was introduced in 2022 after the price of Extra Neutral Alcohol (ENA)—a key raw material for making liquor—shot up, and Kerala had no ENA production facility of its own. To ease the burden on distilleries, the cabinet decided to abolish the 5% ToT they were paying on sales to KSBC.
However, this relief came with adjustments elsewhere. The government simultaneously increased sales tax on foreign liquor by 5% and raised KSBC’s warehouse margin by 1%. It also hiked the price of imported liquor by 2%. These changes were aimed at offsetting the revenue loss, estimated at ₹160–₹180 crore annually, from scrapping ToT for distilleries.
The government has made it clear that breweries will not get the same benefit, keeping the exemption strictly limited to distilleries.
