SHILLONG, Feb 26: The Meghalaya government has decided to reduce the value-added tax (VAT) on liquor from 40% to 37.5% in order not to let the sudden drop in liquor prices in Assam affect its turnover.
The decision was taken in a Cabinet meeting held on Friday. Briefing reporters after the Cabinet meeting, Deputy Chief Minister Prestone Tynsong said that the state government has decided to reduce VAT on different brands of liquor by 2.5%.
“There was a proposal to reduce VAT on different brands of liquors and wines in the state and we decided to bring it down from 40 to 37.5%,” he said.
The lifting charge for retailers has also been reduced from 25% of the value of a case to Rs. 2 per case, Tynsong said. The charge was increased from Rs. 2 per case in May 2020.
The Deputy Chief Minister said that the reduction would peg the state government back by Rs 80-85-crore in annual revenue, but the decision had to be taken because of the tax cuts in Assam.
“We were forced to reduce the VAT on liquor because of the drastic reduction of prices in Assam, which would have cost us more than the loss due to reduction of the tax rate,” he said.
“We are living in a competitive world, even between state governments,” Tynsong added.
