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State govt bracing for exigencies arising due to GST impact on Excise revenue

 With apprehensions high that Goods and Service Tax(GST) may have an adverse impact on State’s Excise revenue, State Government is working out strategies to meet any exigencies.

Sources said that there will be a levy of around Rs.140 crore of GST which will eat away from the State Revenue collected from Excise sources.

Senior officials in the Excise Department are worried over the possible adverse impact of GST on revenue collected from the liquor trade, admits an official.

Notably, GST has been levied on all the fees collected from different sources like Indian made foreign liquor, beer, country liquor, Mahua, Bhang and other items.

Any fee collected will attract 18 per cent GST and according to estimates at least 27 per cent of Excise revenue will now attract GST.

According to sources, out of Rs.2929 crore Excise revenue in 2016-17, Rs.773 Crore collected as fees will attract GST, which works out to Rs139.11 crore.

Sources said for example, Retail License Fee, Bottling Fee, Pass Fee, Application Fee, Manufacturing License Fee, Wholesale License Fee and Other Excise Fee wlll attract GST now.

This will impact the entire supply chain of Excise products while the retailer and the point of sale will be impacted the most and compliance will be additional.

In order to avoid such impact, Government of Telengana brought out major changes in the nomenclature of some of the terms like “Fees,” said the sources adding which prompted that Government to promulgate an ordinance to amend the Telengana Excise Act, 1968.

Accordingly, all “Fees” were termed as “Tax” as the Union Government cannot impose any ‘Tax’ on the ‘Taxes’ already levied by the State. In Telengana the license fees collected for  bars, liquor outlets and others are now termed as “Excise Tax” to avoid GST.

Whether it will stand the Scrutiny of Law is another matter and Telengana Government is determined to continue with this stand.

The sources said, Odisha Government is studying the matter with all seriousness and it remains to be seen if it follow the course of Telengana Government did, pointed out an expert on GST.

Another way to avoid impact of GST is also being discussed, said the sources adding the officials are looking into converting Fees into Duty as the Excise Duty does not attract GST.

However nothing concrete has come out so far of the several rounds of discussions while the consultants are advising re-classifying existing levies as Tax or Duty under Law.

Legal experts are also consulted and the Department of Excise will soon take a final call in the matter, said the sources.

As Excise Policy has already been announced from April 1, any change will attract change in the Policy.

However, senior officials are working out various options to ease the impact of GST on Excise revenue which had been pegged at Rs 3600 crore during 2017-18.

Sources said that as a result of constant monitoring and supervision, Excise revenue collection target of Rs720 crore in the first quarter of this fiscal has already been achieved and officials are optimistic about achievement of Rs 900 crore target for the second quarter.


Précis 2017
From asking his party men to ‘live a simple life and serve the people’ to taunting the BJP for its ‘crocodile tears’, Chief Minister and BJD supremo Naveen Patnaik has not only become politically invincible, he seems to be so in the coming years too.


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