Under the new excise policy of the Delhi government, the prices of liquor in the city may increase due to the opening of private shops from November 17. The Excise Department of the Delhi government, which is in the process of fixing the maximum retail price (MRP) of brands to be registered in Delhi, said in an order on Thursday that the wholesale prices of all types of liquor are expected to increase by 8-9 per cent. Chances are. Percent.
“The increase in wholesale price will increase the MRP of liquor by at least 5-10 per cent, though the real impact will be felt only after the implementation of the new retail system as per the excise policy for 2021-22,” it said. a wine merchant.
Senior officials of the department did not respond when reached for comment. Excise duty and VAT have been subsumed in the license fee in the new excise policy 2021-22. The order states that a nominal excise duty and VAT at the rate of one per cent each will be levied on the wholesale price (WSP) for the retailer to arrive at the landing price.
Impact on WSP due to inclusion of various factors like central sales tax of 2 per cent, profit margin for wholesaler, import pass duty and freight and handling charges, as approved in Excise Policy 2021-22, from 10 per cent to 25 per cent Will happen. The percentage increase for certain brands of whiskey (Indian Made Foreign Liquor or IMFL), with a per unit fluctuation of 8 percent (Royal Stag Premier) to 25.9 percent (Blenders Pride Rare).
“Due to the revised parameters included in the cost card of Indian and foreign liquor under the new Excise Policy 2021-22, the upcoming new WSP is likely to increase by about 8-9 per cent,” the order said.
A similar effect is expected on ether categories of alcohol, it pointed out. Under the Excise Policy 2021-22, all 849 shops will be operated by private entities from November 17.
Till now, the majority of retail sales in Delhi were handled by the agencies of the city government which would shut shop on November 16. About 260 private vendors were closed on 30 September in view of the implementation of the new excise policy. It would be a reasonable assumption that since all contracts will be conducted by private business entities in a competitive market environment, they will operate at their maximum efficiency and are likely to show significant growth in comparison to market size in terms of number of casks sold . Till 2019-20, the order said.
The capping of Rs 50 as retail margin on the sale of IMFL and Rs 100 on the sale of foreign liquor has been discontinued. The order stated that IMFL, there shall be no cap on the retail margin of foreign liquor, beer and wine and the competitive market forces shall keep an eye on the selling price to the consumer. Also, rebate on MRP has been allowed in the Product Policy 2021-22 to bring into effect the competitive market forces.
“It is important that the consumer is not burdened with price escalation. The changes made in the new excise policy will need a fair amount of time to be implemented in the market.” The MRP for 2021-22 should, as far as possible, be the same as the limit prevailing in Delhi.” The effect of increase in WSP (if any) as per approved parameters for the year 2021-22 also stated in the order that Care should be taken while fixing MRP.
The Excise Commissioner will fix the MRP for each product, taking into account the input price of the licensees in the neighboring states of Haryana, Uttar Pradesh, Punjab and Rajasthan, and the price of the product. The licensees have either demanded a uniform percentage increase in the existing MRP or have suggested an ad valorem formula to arrive at the MRP. The MRP prevailing in Delhi was compared with that of the neighboring states and was found to be generally low.
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