Mumbai: Maharashtra Deputy Chief Minister and Finance Minister Ajit Pawar on Monday while presenting the state’s budget increased the State Excise Duty (SED) and VAT on most types of liquor to collect an additional revenue of Rs 1,800-crore.

Presenting the Maharashtra Budget 2021-2022, Ajit Pawar announced SED on branded Country Liquor by 220 per cent or Rs 187 per proof litre, whichever is higher and hoped to net an additional income of Rs 800 crore. Also, VAT for foreign liquors of IMFLs as categorised under Value Added Tax Schedule B has been increased by 5 per cent - from existing 60 per cent to 65 per cent and for liquors specified under Sec. 41(5), it has been hiked from 35 per cent to 40 per cent.

This hike will generate an additional revenue of Rs 1,000-crore for the state exchequer, Pawar said while presenting the budget for Maha Vikas Aghadi (MVA) government led by Chief Minister Uddhav Thackeray. The budget has estimated tax earnings of Rs 2,18,263 crore, which include revised estimates of Rs 1,84,519 crore on account of GST, VAT, CST, PT and other major taxes.

"After looking at the current economic strike in the national and the state economy, it will not be easy to gain the revised revenue estimates as above. However, the government will make efforts to reach the revised target in revenue collection," Pawar said.

Reacting on the hike, Shivanand Shetty, President, AHAR (Indian Hotel and Restaurant Association), said, "Currently, we are doing a dismal 50 per cent of business only because of the cap of 50 per cent on seating capacity at restaurants and also owing to WFH mode adopted by many businesses & corporates. Accordingly, home consumption has gone up with wine shops registering good sales but restaurants getting impacted. So any marginal increase in the excise duty on liquor is likely to drag down the sales."

"We still predict many more restaurants closing down as things are turning to be unsustainable. All this is happening when the burden of paying excise licence fee this month is hovering over us, putting a big question mark on the licence renewal," he added.