The Kerala Government has backed down from its steadfast position and permitted Bevco to pay the excise duty for businesses selling alcohol in the state. Previously, the government had mandated that the liquor companies pay the excise fee to the treasury directly.
According to the most recent ruling, liquor companies must keep a security deposit with Bevco in an amount equivalent to the excise duty they are required to pay. Companies whose deposits are less than the duty amount must pay Bevco the difference. Beginning on January 15, this arrangement will be in place.
The only wholesaler and retailer of alcoholic beverages in Kerala is called Bevco, or Kerala State Beverages Corporation.
On behalf of the alcoholic beverage producers, Bevco is required to pay the government approximately Rs 2,500 crore in excise duty each year. Bevco receives booze from more than 100 businesses. Although the Abkari Act mandates that businesses pay excise duty to the government directly, the money has been going through Bevco for the previous few years. Bevco transferred the excise duty amount that had been deducted from the price of alcohol paid to the businesses to the government.
However, an audit report made it clear that this illegal arrangement put Bevco under significant financial strain. The Managing Director of Bevco subsequently ordered that businesses pay excise duty to the government directly in November 2021.
The booze companies restricted their supply to Bevco in defiance of this directive. When faced with criticism over inadequate supply to Bevco, then-Excise Minister M. V. Govindan met with representatives of the businesses and issued the order.
The minister and the companies decided to allow businesses to pay excise duty directly starting in the fiscal year 2022–2023 during their meeting. However, this choice was not made. It is now claimed that the most recent order was given in an effort to undermine this ruling in favour of the liquor companies.
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