BAI WELCOMES RESTRUCTURING OF TAX ON ALCOHOL IN WEST BENGAL
ENCOURAGE MODERATE DRINKS, NOT PENALISE THEM: BAI DG VINOD GIRI
Kolkata/New Delhi, November 19, 2025: Brewers Association of India (BAI) has welcomed the move by the West Bengal Government to generate more tax revenues by way of restructuring of taxes on alcoholic beverages. Its impact on consumer prices of spirits will be marginal and will not distort the market, and yet allow Government to earn more revenues, BAI said in a statement.
The recent decision by the Government of West Bengal to increase excise duties on spirits by 2-4% w.e.f. 1st December this year but keeping taxes on beer unchanged reflects a practical and balanced approach to increasing state revenues. This may help the West Bengal Government collect an estimated Rs.600-700 crores, thus filling up the expected shortfall in GST to the tune of Rs.500 crores due to recent reduction in rates, it added.
“The decision to leave beer out of the tax increase is welcome since beer is already taxed 35% higher than liquor in real terms. Globally, most Governments tax products with low alcohol content less compared to hard liquor for desired public health outcomes. The World Health Organization also recommends linking alcohol taxation to alcohol content. It’s a framework that encourages moderation while protecting state revenues,” said BAI Director General Mr Vinod Giri.
Excise revenue from alcohol contributes between 10% and 25% of total state own tax receipts, making it one of the most dependable levers of state finance. With limited revenue autonomy in other areas, State Governments often turn to alcoholic beverages industry for revenues. Such actions, when well considered and data-driven, can not only help generate more taxes but also encourage more responsible alcohol consumption.
Some other states such as Maharashtra, Assam and Meghalaya have also implemented similar policies to great success. Maharashtra increased taxes on spirits by 50% leaving beer intact, and its total tax revenues have gone up by 16%. Tax revenues in Assam have also seen a surge after it reduced taxes on beer to reduce the gap in consumer prices of beer compared to IMFL. The BAI anticipates that, as the policy-making cycle commences across other States, more may recognize the efficacy of this holistic strategy. This approach serves the dual objective of maximizing fiscal returns while promoting crucial public health outcomes by encouraging moderate consumption.
