Delhi will hit Rs 10K cr revenue under new excise policy: Dy CM
New Delhi: Announcing that the Delhi government is set to earn a whopping Rs 10,000 crore in excise revenue under its new policy, Deputy Chief Minister Manish Sisodia on Wednesday said that bidding for vends in all 32 newly carved-out zones had been completed and that the government was set to exit the liquor business on November 17, from when the new and swankier liquor vends will start operating.
Under the bidding of 850 liquor vends divided into 32 zones, the government has earned around Rs 8,911 crore against the base reserve licence fee of Rs 7,039 crore, officials said.
In addition to the Rs 8,900 crore earned from the bidding of retail vends, the additional projected revenue after collecting excise, VAT, import fees, CSDN, HCR licenses, wholesale licenses, and HCR VAT, will be approximately Rs 650 crore, taking the total projected revenue close to Rs 10,000 crore, they added.
The AAP-led Delhi government has decided not to renew licences of around 260 liquor vends run by private operators after September 30. However, remaining liquor shops run by government agencies will continue retail sales till November 16, by when the transition should be complete, they said.
"The bidding was very fair. The highest bid in each zone won in a very transparent manner. Adding all the bids, the government will get a revenue of approximately Rs 10,000 crore which is a matter of relief for us," Sisodia said in a press briefing.
"Under the new excise policy, the biggest change was that we converted excise duty and value-added tax (VAT) which is usually evaded, into licence fees. Till now the license fee was very nominal, around Rs 8-10 lakh, and then there were 250-300 per cent excise fees and VAT. Because of having higher rates, it had an incentive for evasion," Sisodia, who is also the Delhi finance minister, said.
The low license fee that used to be Rs 8-10 lakh on average rose to be around Rs 6.5-7 crore per shop. It was further increased by 10 per cent and then bids were invited, he said. "The government will receive Rs 3,500 crore extra revenue in the next 12 months," he noted.
Each of the 32 zones will have nearly 27 liquor vends that will provide consumers walk-in facility and choice of preferred brand.
Sisodia said the new policy will help consumers who are currently forced to buy liquor bottles from small cramped vends. Each liquor shop now will be air-conditioned and spread over 500 square feet so that the consumers may go inside and buy liquor.
In the previous excise regime, a total of Rs 6,900 crore was collected in the fiscal year 2019-2020 after collection of excise from Indian and foreign liquor, VAT collected from wholesale and retail sales, HCR excise, and retail licensing fees, officials said.
The biggest grosser in the bidding was zone 31 comprising the New Delhi Municipal Council (NDMC) and Delhi Cantonment area, which earned the highest price of
Rs 315 crore, against a reserve price of Rs 217 crore. Zone 32 or airport zone earned Rs 235 crore against a reserve price of Rs 105 crore.
Zone 19 comprising Daryaganj, Chhatarpur, CR Park, Sangam Vihar, Chandni Chowk and other areas went for Rs 313 crore against the reserve bid price of Rs 225 crore, they said.
The successful bidders will have L-7Z or L-7V licences for retail sale of Indian and foreign liquor.