Diners froth as Mumbai restaurants & bars hike liquor rates by 75%

MUMBAI: Party animals and even those who enjoy the occasional drink and meal out are in for some gloom. Not only has the hike in the price of liquor beginning April 15 thrown entertainment expenditure out of gear, even the comfort of air-conditioners could soon be a thing of the past. To cope with increasing taxes and to avoid hiking prices further, restaurant and bar owners are thinking of doing away with ACs, which invite a special central government tax.

After the central and state budgets imposed new taxes at the beginning of this financial year, the retail price of Indian-made foreign liquor (IMFL) brands went up by 40% to 56%. The hike on beer is a minimum 18% to 49%. The hike takes the prices of IMFL bottles up by 133% to 233% more than their prices in the neighbouring state of Goa.
“In bars, pubs and restaurants, the hike will be even greater—it could be beyond 75%,” said Sudhakar Shetty, president of Ahar, an association of over 8,000 hotels, restaurants , permit rooms and bars in the Mumbai region.
Restaurants weigh strike against tax

As if the hike in liquor prices was not enough, Mumbaikars may have to go without their favourite tipple altogether if bars and restaurants make good their threat. The Association of Hotels and Restaurants (Ahar) and its sister affiliates across the state are contemplating a strike to protest the hike in liquor taxes.

“If the exorbitant hike is not withdrawn , the association will call on all its permit room hotelier members in Mumbai as well as other sister associations throughout Maharashtra to down their shutters in protest,” said association president Sudhakar Shetty . Sukesh Shetty, secretary of Ahar, said, “The 10.30% service tax in the 2011 Union Budget on air-conditioned hotels serving liquor has already increased prices. We fear the new taxes
will affect the business of permit rooms and encourage bootlegging .

Not only will this result in huge loss to the state exchequer, but spurious liquor will endanger lives.” Sudhakar said, “Over 500 restaurants shut down in the past few years because of severely dwindling profits. The hotel industry, which generates crores of rupees by way of VAT, licence fees and service charges for the government , will be unable to absorb this hike and this will affect lakhs of people employed in the business.” The Ahar president added restaurants were considering removing air conditioners to avoid the service tax. Aniruddha Rao, owner of a restaurant in Malad, is dismayed. “Every time there’s a hike, we can’t pass it all to consumers. We are already losing clients and will lose even more now.”

Imported Liquor Brands To Be Hit Too
Imported liquor brands like Chivas Regal and Black Label too are likely to become more expensive in Mumbai following the increase in excise duty. Industry sources said the pure imported liquors are usually sold at Rs 3,400 per bottle (750 ml). Now their prices may go up to Rs 4,200. Sources said Mumbai has one of the highest sales of foreign liquor in the country