Shimla: The government today said that liquor smuggling had reached alarming proportions with bootlegging making up for as much as 35 percent of sales recorded which was burning a big hole into the states revenues.
In the current financial year alone 12,000 liters of smuggled was seized, a government spokesman said.
To check it the government has decided to act on two fronts, one to reduce VAT on alcohol from 20% to 12.5 % to make bootlegging less lucrative and secondly by improving vigilance at the tax barriers, the spokesman said.
To make up for revenue losses that the state exchequer would incur on reduced VAT charges on alcohol products, the state government intends to strengthen the multipurpose tax barriers for checking bootlegging of liquor that is burning a hole in revenue receipts.
The government plans to strengthen working of the multipurpose barriers, both in terms of staff and induction of appropriate technology to check the menace of inter-state smuggling of liquor. Appropriate changes in legal framework are also envisaged to make such activities attract a more deterrent punishment, a government spokesman said.
These steps would help the state to mop up additional revenue of Rs 40 crore as compared to the current year, the spokesman claimed.
He went onto add that these steps would diminish the effect of smuggled and illicit liquor in the state which would translate into increased sales of liquor through authorized retail vends. “Increased sales of liquor will on the one hand more than offset the revenue loss due to reduction of VAT and license and on the other will ensure the safety of consuming public,” he said.
The government spokesman held that smuggled liquor supplied from neighbouring states had reached alarming proportions and made up for as much as 35 percent of sales in the state.