Liquor to cost more in Punjab as ‘COVID-19 Cess’ levied to compensate for revenue losses

In a move to help the state earn an additional revenue of Rs 145 crore in the current fiscal, the Punjab government has imposed a ‘COVID-19 Cess’ on liquor sold in the state.

Faced with huge revenue losses resulting from the Coronavirus pandemic and the prolonged lockdown imposed in its wake, Punjab Chief Minister Capt. Amarinder Singh on Monday gave the go-ahead to the imposition of the cess with effect from June 1.

The state is facing a revenue shortfall of Rs. 26,000 crore, which is 30 per cent of the total budget revenue estimates, in the financial year 2020-21.

Accepting that some tough measures were needed to generate additional revenue, the Chief Minister accepted the recommendation to levy Additional Excise Duty and Additional Assessed Fee on liquor during the current financial year.

The CM said that the additional levy shall be utilized entirely for COVID-19 related expenditure and that directions have been given to the Department of Excise and Taxation to charge the cess in the current year at the time of issuance of permits for transportation of liquor from L-1/L-13 (wholesale licenses).

Capt. Amarinder Singh had earlier asked the Group of Ministers (GoM), comprising the Finance Minister, the Education Minister, the Housing & Urban Development Minister and the Forests & Wildlife Minister, to examine the proposal regarding levy of Special Cess/COVID-19 Cess on the sale of liquor, to partially recoup some of the revenue losses amid this unprecedented crisis.

The Department of Excise and Taxation has decided to impose Additional Assessed Fee on imported foreign liquor and imported beer, and Additional Excise Duty on other types of the liquor.