Separate decisions approved by the Kerala State Cabinet on Wednesday will result in higher liquor and milk prices here.
Sales tax on liquor has been revised up by four per cent, which will come into effect sequentially, while milk will turn costlier by ₹6 from December 1.
The price of Indian Made Foreign Liquor (IMFL) is expected to increase ‘in the coming days,’ a spokesman said. Price of foreign liquor will be increased by two per cent.
Contrary to signals emanating till the other day, the State government decided to forego the five per cent turnover tax charged from distillers who manufacture and sell foreign liquor in the State.
Assembly to move enabling bill
The decision to raise the sales tax on liquor was taken under the Kerala General Sales Tax Act of 1963, according to a statement issued by the Chief Minister’s Office. The State government has also allowed Kerala State Beverages Corporation (KSBC) to raise the warehouse margin by one per cent.
The KSBC has complete control over the entire supply chain of alcoholic beverages in the State.
The government plans to move a Bill in the State Assembly as its decision to waive the turnover tax will result in a loss of revenue to the State. A Bill will therefore be presented in the House to suitably amend the Kerala General Sales Tax Act, 1963.
Milk price revision
Meanwhile, the State cabinet gave the go-ahead for a hike in milk sold by Kerala State Cooperative Milk Marketing Federation (Milma) by ₹6 based on the latter’s recommendation.
“The decision had become unavoidable due to due to increase in the cost of cattle-feed production,” said Milma chairman KS Mani.
Milk prices were revised upwards last three years ago in 2019. As much as 83.75 per cent of the price increase would go to dairy farmers, 0.75 per cent to the welfare fund, and 5.75 per cent each will go to dealers and the Federation.
Another 3.5 per cent will go to the regional unions and 0.5 per cent to activities related to plastic eradication.
“Dairy farmers will get the same benefit as they did in 2019 when milk prices went up by ₹4 per litre,” Mani said.
Hike ‘at a discount’
The announced hike is at a discount to the margin originally recommended by a two-member panel appointed by Milma that had suggested a hike of ₹8.57 per litre last week.
“The decision to hike the price by ₹6 will go to protect the interests of both the farmers and consumers,” Mani said.
Currently, the Milma double-toned milk costs ₹44 per litre; toned milk (homogenised) is ₹46; and Milma standardised milk is ₹52 per litre.
The price of milk-based products is also likely to rise soon, with Milma already asking officials to work out the details.