No Special Corona Tax on Delhi Liquor

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The Delhi government has announced that Special Corona Tax on Delhi Liquor shall be now lifted.

In the wake of the Novel Coronavirus disease or COVID-19, the government had further extended the Lockdown till 30th June 2020, under the Disaster Management Act, 2005. The sale of alcoholic beverages was permitted during the lockdown, but the Delhi government had levied a Special Corona Cess @ 70%.

 

Delhi government lifts Special Corona Tax on Delhi Liquor

The Delhi government on Sunday had decided to withdraw the 70% Special Corona tax on the sale of alcohol in the national capital. With that, today Delhi Wine Shop rate was expected to fall. But it is really so? Let us understand.

 

No Corona Tax on Delhi Liquor: So Liquor cheaper now?

Though the Delhi government has withdrawn the Special Corona tax on the sale of alcohol, they have decided to increase the Value Added Tax (VAT) on alcohol from 20%-25%. Now, let us see whether this would make liquor cheaper or not.

CASE-I:

  • Suppose, Price of a bottle of liquor= INR 1,000/-
  • Add:- VAT @ 20%                         =  INR  200/-
  • Add:- 70% Special Corona Cess     = INR   700/-
  • Cost of the liquor bottle                 = INR 1,900/-

 

CASE-II:

  • Suppose, Price of a bottle of liquor= INR 1,000/-
  • Add:- VAT @ 25%                         =  INR  250/-
  • Cost of the liquor bottle                 = INR 1,250/-

So, the answer is:- Yes, the Delhi liquor would become cheaper.

Very importantly, GST is not applicable to alcohol. However, the GST registration is mandatory for the dealer of liquor if his annual turnover is above INR 40 lakhs.

 

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