Maharashtra Govt Hikes VAT On Alcohol Served In Bars, Cafes, Lounges From THIS Date-DETAILS INSIDE

Maharashtra government’s latest move will not impact the prices for over-the-counter sales at wine shops

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Maharashtra Govt Hikes VAT On Alcohol Served In Bars, Cafes, Lounges From THIS Date-DETAILS INSIDE
The price of liquor served in bars, lounges, and cafes in Maharashtra is all set to take a hike from November 1, as the state government plans to increase the Value Added Tax (VAT) by 5 per cent for permit room liquor services. 

However, this move will not impact the prices for over-the-counter sales at wine shops!

It is also worth noting that the liquor services in star hotels won't experience a tax increase as they already pay a higher VAT rate, currently set at 20 per cent. 

Nevertheless, following the new directives from the state government, hoteliers expressed concerns while discussing the implications of the VAT rate increase. They also mentioned that the recent surge in the license fees imposed by the government had already raised the liquor prices for consumers, making the decision to increase VAT surprising.

As per Pradeep Shetty, the president of the Hotels and Restaurants Association of Western India (HRAWI), the move comes at a time when many states are actively lowering excise duties to boost their tourism industry and drive economic growth.

Some examples of this trend include Goa, Chandigarh, and Haryana.

The increase in VAT is likely to drastically change consumer behaviour as it could steer customers towards more affordable alternatives like off-premise consumption, such as enjoying drinks on building terraces, in parks, on beaches, or in parked vehicles. These acts could also harm bars and restaurants economically but also pose potential challenges to law and order, particularly regarding issues like drinking and driving, said industry sources cited by TOI. 

In addition, the state government is reportedly considering a new excise policy that would link pricing to the alcohol content of beverages and allow the sale of bottled liquors in bars and permit rooms.

The latest development comes in the wake of previous reports suggesting the rise of liquor prices in Gurugram due to shortages of popular brands in Delhi. The shortage was attributed to Delhi's controversial excise policy and the rejection of sale licenses for major liquor companies, which led to higher prices in Gurugram as customers sought out popular alcohol brands.

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