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The hike in sales tax on liquor and tobacco products came into force on Friday, making them costlier in the State
Tax on Indian made foreign liquor (IMFL), beer and wine have gone up by 20 percentage points while there is an 8 per cent rise in tax on cigarettes and other tobacco products.
Additionally, a five per cent cess has been imposed on all drinks to find resources for rehabilitating employees of bars who will lose their jobs once the government’s decision to close all the bars in the State, except those attached to five-star hotels, takes place.
This is the second time that the government increased tax on liquor this year. The latest increase will result in rise in the prices of liquor in the range of ₹ 50-150 a bottle.
Sales tax is one of the several taxes and charges the end consumer pays for liquor, which is sold by the government liquor monopoly Kerala State Beverages Corporation. The end-consumer price is more than six times the rate at which KSBC purchases liquor. Kerala is one of the costliest liquor markets in the country.
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