Hyderabad: With the state govt yet to take a final call on liquor price revision, industry circles are abuzz with speculation that the state may opt for a tax rationalisation route rather than allowing a steep increase in retail prices. The move, if adopted, could give liquor manufacturers the relief they have been seeking while shielding consumers from paying more at liquor outlets.The uncertainty follows the postponement of Monday’s meeting of the price revision committee, which was expected to deliberate on revising liquor prices. The delay has triggered fresh discussions within the industry over the formula the govt may eventually adopt to break the deadlock over the long-pending revision.According to sources, one of the key options under consideration is reducing or withdrawing certain levies imposed on liquor manufacturers, particularly the Covid-19 cess introduced during the pandemic. Industry stakeholders believe such a measure could help offset rising production costs and facilitate a price revision without increasing the liquor maximum retail price (MRP).The issue has assumed significance as any increase in retail prices is expected to widen the price gap between Telangana and neighbouring Andhra Pradesh and Karnataka. Officials fear that a higher MRP could encourage cross-border purchases, affecting liquor sales within the state and potentially impacting excise revenues.It was partly due to these concerns that the excise department reportedly put the annual price revision exercise on hold, despite the price revision committee completing consultations with liquor manufacturers.Industry representatives have been pressing for an increase in ex-distillery or procurement prices, arguing that operating costs have risen sharply over the past year. Manufacturers have cited higher prices of extra neutral alcohol, glass bottles, packaging materials, transportation and labour as reasons for seeking a revision.However, instead of passing the entire burden on to consumers through higher retail prices, officials are understood to be exploring whether some relief can be provided by restructuring the tax component.“The buzz is that instead of allowing a higher MRP, the govt could cushion consumers by reducing some of the taxes levied on liquor manufacturers. Among the options being discussed is a cut or withdrawal of the Covid-19 cess, enabling companies to secure the price revision they have sought without increasing retail prices,” a source said.Sources said the govt is keen to strike a balance between protecting consumer interests and addressing the concerns raised by manufacturers over rising input costs.Senior officials, however, maintained that no decision has been finalised. The price revision committee is expected to reconvene after further consultations with the excise department and the finance wing.The committee is then likely to submit its recommendations to the govt, which will take the final call on whether liquor prices are revised, taxes are rationalised, or a combination of both measures is adopted.
