Mumbai, October 21: Cost of liquor served in bars, lounges and cafes will rise starting November 1 in Maharashtra as the state government has decided to increase the Value Added Tax (VAT) by 5%. The finance department issued a notification stating that the VAT rate for permit room liquor services will now be 10 per cent, up from the previous 5 per cent.

TOI quoted experts as saying that there might be a slight initial decline in sales due to reaction to this decision, but it is anticipated to stabilise over time. Liquor Sale Jump in India: Sales of Indian-Made Foreign Liquor Grow 14%, Premium Alcohol Sale Rises by 48% in 2022-23.

"The hike is not fair on restaurants as there is a clear discrimination on wine shop sales and on-the-premise-consumption. This will definitely affect sales in our industry thereby directly affecting employment, compared to retail sales. Restaurant industry employs six to eight times more people than the retail industry," said Sukesh shetty, president of AHAR, an association of over 15,000 premium hotels, bars and restaurants in MMR. Delhi: ‘Our Business Suffering’, Say Restaurant Owners on Government Barring Many Premium Liquor Brands.

The Maharashtra alcohol price hike may drive customers towards other affordable alternatives like off-premise consumption, such as on building terraces, parks, beaches or parked vehicles.

Officials said that the Maharashtra government is also thinking of bringing in a new excise policy wherein the pricing is expected to be linked to the alcohol content of the beverages. While the decision might render beers cheaper, the government is looking at it as a means to boost up its revenue. However, details and the timeline for the proposed policy are still under discussion.

(The above story first appeared on LatestLY on Oct 21, 2023 03:59 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).