Friday, May 22, 2009

Ever heard of 90% tax on any product ?

A few friends whom I had not seen in years had come down on vacation to Kerala last week
from the Middle East (Gelf in Mallu parlance) where they work and we decide to catch up
on each other's lives over a few pegs. So in the evening, we go to the liquor store, run by the Kerala Government owned Beverages Corporation of Kerala (locally known as BEVCO), something similar to the TASMAC in Tamilnadu. However, unlike Tamilnadu where you
have liquor stores all over the place, in Kerala they have only one per town.

We buy a full bottle of Mansion House brandy, which the sales guy helpfully covers with a
sheet of old newspaper. We also get some fried chicken, a few packs of potato chips and a
couple of 2-litre bottles of soda and go to the home of one of the guys. His folk have gone
out of town, so we have the place all to ourselves.

I unwrap the liquor to find a piece of paper fall to the ground. Pick it up and see that it is
actually a bill for our purchase. This is surprising for me because in Tamilnadu they dont
give you a bill for the liquor you buy. Heck, at most shops, they wouldn't even return small change if you don't ask for it.

Anyway, I have reproduced below verbatim, the pertinent contents of the sales receipt.
Mansion House Brandy (750ml) : 225.25 Rs
Tax (at 90%) -------------------: 202.72 Rs
Cess (1% of tax) ------------------ : 2.02 Rs
________________________________
Total ---------------------------: 430.00 Rs

I knew that tax on liquor (and cigarettes) is pretty high, but still did not think that it would
be as high as 90% of the value of the product. This was an eye-opener for sure. No wonder
that inspite of paying lip-service to prohibition, no government actually takes any step to
stop sales of liquor.

If it was some other product, would we buy it paying such heavy taxes ? Most probably not.
And the government knows this, which is why they tax liquor and cigarettes so heavily.

1 comment:

  1. Anonymous2:26 PM

    will this stop you and your readers from buying it ??

    ReplyDelete