IMFL Shortage to End as Govt Revises Excise Duty Rates

A prolonged scarcity of Indian Made Foreign Liquor (IMFL) in retail outlets, which has persisted for the past three months, is anticipated to be resolved following the government’s recent revision of excise duty rates. The shortage resulted from uncertainties surrounding the new excise duty slabs, which led to a halt in production by breweries.

The crux of the issue was the government’s plan to overhaul excise duty slabs, creating confusion among breweries about the financial implications. As breweries are required to pay taxes upfront before production, the uncertainty over new rates made them hesitant to continue operations. They faced the challenge of having to produce liquor at higher costs while being forced to sell at potentially lower prices.

The situation began to improve when the government released the revised excise duty rates on Saturday. According to excise department officials, the new price list has been confirmed, and liquor vendors are optimistic that the IMFL supply will return to normal within the next couple of weeks.

“The lack of availability of nearly half of the IMFL brands over the past three months was due to the uncertainty regarding the excise duty revision,” remarked outlet owners. “Customers had to go without their favourite brands during this period.”

Ramesh D Nayak of Rathna’s Wine Gate in Mangaluru noted that the revised rates could result in price changes for various brands. “Some premium brands, which attract higher excise duties, are likely to see a price reduction, while others may become more expensive,” he said. Nayak also mentioned that beer prices are expected to rise soon.

The primary aim of the price revision is to stimulate sales, increase government revenue, and align Karnataka’s liquor prices with those of neighbouring states, thereby preventing revenue loss due to price discrepancies. The adjustments are designed to address revenue leaks and bring consistency to the market.

As the new rates take effect, consumers can expect a return to normalcy in IMFL availability, alleviating the inconvenience experienced over the past months. Retailers and customers alike are hopeful that the changes will stabilise the market and restore access to a full range of liquor options.