Surat: Imported liquor prices at permit shops across Gujarat have risen by 60% to 90% after a change in the calculation of special fees, under a new excise management system, triggering a sharp drop in sales and uncertainty among permit holders and retailers.The Gujarat govt recently introduced the Liquor and Excise Management System (LEMS) at permit shops. With its implementation, prices of several imported liquor brands have increased significantly. Prohibition officials attributed the increase to a Comptroller and Auditor General (CAG) audit query regarding the calculation of “special fees”.In the first week of Sep, liquor sales have fallen to around 30% of normal levels.Mitul Patel, deputy director of the prohibition department, told TOI: “We received a CAG query over the calculation of special fee based on the govt notification. To address the query, we implemented the special fee as suggested by the CAG which may have led to an increase in prices of imported liquor. The govt will soon form a committee to decide on the formula. Until the committee is formed and a decision is made, the CAG’s suggestions will be implemented.”Under the revised formula, the special fee on 750ml bottles with a basic value of up to Rs 1,500 has been increased from Rs 375 to Rs 1,500. Several brands with a basic value of up to Rs 6,000, which earlier attracted a special fee of Rs 1,500, have shifted to the next slab, carrying a special fee of Rs 6,000.As a result, brands such as Red Label, Absolut, Ballantine’s, J&B, John Barr and Scottish Leader have become 60% to 70% costlier. Imported brands that were available for about Rs 3,100 are now selling for Rs 4,950. Premium brands such as Glenfiddich have risen from around Rs 10,000 to nearly Rs 18,000.According to liquor shop owners, the dispute centres on the interpretation of a formula contained in a govt notification issued on April 1, 2018. The notification classified spirit, wine and beer brands as “Indian” and “imported” and prescribed the special fee structure.An FL1 (Foreign Liquor 1) wholesale distributor told TOI: “At present, there are more than 90 liquor shops are in Gujarat. The new formula came in with the new software implemented from Sep 1. With the festival season and new formula, sales have reduced to 20% to 30%. When the situation normalizes, we expect sales will be halved with such prices. We have made oral representations to the govt and have been assured that a committee will be formed to decide the formula.”A liquor permit holder told TOI: “I went to get an imported foreign liquor bottle which I used to get for Rs 3,100. The shop owner has raised the price to Rs 4,950. I had to forgo it and opt for another brand. The govt must change this policy, as a bottle that is available for Rs 1,200 to Rs 1,500 in other states, is now available for Rs 4,950 in Gujarat. This is ridiculous.”Shops have stopped selling expensive brandsWith the new pricing formula in place, many permit liquor shops have removed price tags from display bottles of imported liquor. “To avoid arguing with customers over prices, we had to remove price tags. We have stopped selling brands such as Glenfiddich as the price has shot up by more than 70%. We will wait until the uncertainty over pricing is removed,” a permit liquor shop owner said.
