Liquor prices in Delhi hiked by 70% with 'Special Corona Fee'; other states might follow suit

In a bid to boost its revenue, the Delhi government has levied a 70 per cent tax on liquor which will come into effect from Tuesday, May 5. Named as 'Special Corona Fee', the COVID-19 cess was announced by the Finance Department of the Delhi government through a written order.

"70 per cent of the maximum retail price on all categories of liquor sold through retail licensees for consumption 'off' the premises," read a notification issued by Deputy Secretary (Finance) Sunil Sehgal and approved by Lieutenant Governor Anil Baijal.

The move to cash in on the plentiful sale of alcohol in the national capital comes shortly after a cabinet meeting chaired by Chief Minister Arvind Kejriwal. Liquor shops reopened in Delhi after over a month since a lockdown was enforced to fight the spread of the novel coronavirus.

As per relaxations given by the Delhi government, only standalone wine shops are allowed to remain open. And out of the total 475 shops owned by the government, only 150 qualify as standalone shops.

Delhi earned massive excise revenue from liquor sale last year

In Fiscal Year (FY) 2019-20, the Arvind Kejriwal-led Delhi government collected excise revenue of Rs 5,480 crore from alcohol. For the current FY, the national capital had projected total revenue of around Rs 6,279 crore through liquor sale before wine shops were shut due to the coronavirus lockdown.

Other states are likely to follow suit and impose an extra charge on the sale of liquor to harvest revenue that has been swamped pertaining to the ongoing pandemic. The lockdown has heavily affected state revenue and adding cess to liquor could help states in making up for the lost revenue. As of now, mostly two types of taxes are levied on alcohol, Excise Duty and VAT (Value Added Tax), which contribute to its rising prices.

Other states haven't officially confirmed whether the "special corona fee" would be included in liquor prices. We are reaching out to state CMs to see if such a move is in consideration and we'll update the copy. 

Special Corona Fee: Reactions

Here is how Twitter reacted to the news of 'Special Corona Fee':

Long queues were seen outside liquor stores across the country as various states commenced alcohol sales from Monday, May 4. Karnataka's revenue department made a record collection of Rs 45 crore in one day as the state sold around 3.9 lakh liter beer and 8.5 lakh liter of Indian-made foreign liquor.

Delhi's revenue hit hard by coronavirus lockdown: Kejriwal

Announcing that the time has come to reopen the national capital, CM Kejriwal in his press conference on Sunday, May 3, said that the Delhi government will implement all the lockdown relaxations prescribed by the Ministry Of Home Affairs (MHA).

He further stated that authorities have made full use of the lockdown so far and are now experienced enough to deal with the prevailing COVID-19 situation. He also appealed to people to consider the present situation as the new normal and to learn to live with the novel coronavirus.

"One-and-a-half month has passed since the lockdown was first imposed. Delhi is now ready to open. The public is agitated as people are losing jobs. The economy has also gone haywire and the government has no source of revenue. We cannot pay our employees with the existing revenue. It has fallen from ₹3,500 crores in April month of the previous years to ₹300 crores this year," said Kejriwal.