Cheaper liquor from Chandigarh flooding other states

January 2nd, 2009 - 12:46 pm ICT by IANS  

Shimla, Jan 2 (IANS) Low levies on spirits in Chandigarh seem to be leading to increased smuggling of cheap liquor from there to neighbouring Punjab, Haryana and Himachal Pradesh.R.D. Dhiman, Himachal Pradesh excise and taxation commissioner, said the levy on a bottle of liquor was Rs.100 in Punjab, Rs.89 in Haryana and Rs.88 in Himachal Pradesh, while it was just Rs.15 in Chandigarh.

According to him, this was leading to rising liquor smuggling to Punjab, Haryana and Himachal Pradesh.

“A bulk of the liquor flows to neighbouring states,” said Dhiman, who last month met the excise commissioners of Punjab and Haryana in Chandigarh to discuss the issue.

He pointed out that about 50 million proof litres of liquor were sold in Chandigarh in 2007-08, but the city’s residents consumed only about 27 million proof litres. One proof litre is equivalent to 2.66 bottles.

“Chandigarh has a population of 10 lakhs (one million). Per person liquor consumption was 27 proof litre. So where did the rest go? This extraordinary sale of liquor (50 million proof litres) cannot be entirely to Chandigarh residents alone,” Dhiman told IANS.

He said there was also a strong possibility of liquor from Chandigarh being smuggled to Gujarat, which is under prohibition.

“It is the liberal liquor policy of Chandigarh that is hitting Punjab, Haryana and Himachal Pradesh. In Chandigarh, a liquor licensee can purchase unlimited liquor, while in the neighbouring states, the government has fixed a quota as per the population the vendor caters to. The policy to purchase unlimited stock is promoting liquor smuggling,” Dhiman said.

Himachal Pradesh government estimates say the state is losing over Rs.500 million annually because of liquor smuggling.

“Since it is a clandestine trade it is difficult to assess how much liquor is being smuggled out of Chandigarh. But the decline in Himachal’s revenue is an indicator,” Dhiman said.

An official of the Punjab excise department, requesting anonymity, said the cheap liquor available in Chandigarh is also encouraging consumers to buy from the union territory, instead of from outlets in Punjab.

“The rate difference between Chandigarh and Punjab is over Rs.350 per case of regular IMFL (Indian made foreign liquor) brands. In the case of premium brands, the rate difference is more. Also, Chandigarh licensees near the borders with Punjab and Haryana quite often lower retail sale rates,” the official said.

Faced with such a scenario, the three states have decided to take up the matter with authorities in Chandigarh to press for a stricter liquor policy.

“We (Punjab, Haryana and Himachal Pradesh) have jointly taken up the matter with the Chandigarh administration regarding low levies on liquor and allocation of unlimited quota to licensees, but it (Chandigarh) is not cooperating,” he said.

Chandigarh’s Excise and Taxation Commissioner R.K. Rao refused to comment on the issue.

As against the 50 million litres of IMFL sold in Chandigarh in the last financial year, 19.5 million proof litres were sold to a population of 6.5 million in Himachal Pradesh.

The sale of country liquor is also quite high in Chandigarh. This, according to Dhiman, is because the levies on country liquor in Chandigarh are barely one-third of that in the neighbouring states.

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