AP to reduce liquor prices to promote consumption?

The Andhra Pradesh government headed by chief minister N Chandrababu Naidu is reportedly considering a proposal to reduce the prices of premium liquor brands in the state to encourage liquor consumption and fill up empty coffers.

According to officials from the excise department, lowering prices of premium brands would also help curb the increasing inflow of non-duty-paid liquor from neighbouring states and improve government revenue.

According to sources, the proposal may soon be discussed in the state cabinet before a final decision is taken.

Premium liquor brands are currently believed to be priced higher in Andhra Pradesh compared to neighbouring states. Readmore!

For instance, a bottle of imported liquor that costs around Rs 22,000 in Telangana is reportedly sold for up to Rs 25,000 in Andhra Pradesh, depending on the brand. 

The price difference has reportedly led to a rise in illegal inflow of liquor purchased from other states and sold without paying applicable duties.

Officials say that reducing the prices of premium brands could boost legal sales within the state and increase excise revenue. If the cabinet approves the proposal, prices of nearly 20 premium liquor brands could be reduced.

Estimates suggest that the price of each bottle could come down by Rs 2,000 to Rs 3,000. However, clarity on the exact extent of the reduction is yet to emerge.

Following the formation of the coalition government in Andhra Pradesh, the liquor policy underwent significant changes.

While the previous government had run liquor retail outlets directly, the current administration restored the tender system for allotting shops to private operators.

The government had earlier reduced the prices of around 40 liquor brands. However, premium liquor prices were left unchanged, which officials believe encouraged the illegal sale of non-duty-paid liquor.

Under the law, liquor sold within a state must carry excise duty and taxes paid to the government. Liquor sold without paying these taxes is termed non-duty-paid liquor and its sale is illegal. 

In many cases, traders procure liquor from states where prices are lower and sell it illegally in states where prices are higher.

The proposed price revision is being seen as an attempt to curb such illegal trade and strengthen the state’s excise revenue.