With 20%, 18 out of 95, of liquor vends failing to find takers even after 13 rounds of auctions, the UT excise and taxation department has slashed the reserve price for next round by 50%, the highest-ever reduction. The 14th round of auctions is scheduled for June 5.
Out of the 13 rounds, the vends failed to find any takers in third, fifth, eighth, ninth and 12th round of auction. The department has been slashing the reserve price by around 5% since round three.
A senior officer of the department familiar with the matter said the call regarding the number of rounds to be held will be taken by the officials concerned.
Last year, three of the 96 vends on offer had gone unsold in seven auctions.
Liquor contractors claim a lopsided tax structure when compared to neighbouring state of Punjab is the reason behind the vends going unsold. Although officials admit that this is true, the department has failed to address the issue.
Darshan Singh Kler, owner of Kler wines, who bought six liquor vends in the auction on March 15, said, “I fail to understand their desperation of holding auctions. They should stop and concentrate on the vends that have already been sold.”
The department has fixed a revenue target of ₹830 crore from liquor vends’ license fee and has been able to collect nearly ₹500 crore so far.
UT had failed to achieve its target revenue last year, primarily due to the introduction of uniform liquor prices in tricity. If vends go unsold this year as well, it would further dent the administration’s excise revenue.
While the value-added tax (VAT) in Punjab is set at 1% of ex-distillery price (EDP), it is 12.5% in the UT. High licence fee is yet another reason behind the vends not attracting bids.
Besides, UT has also fixed quota at 18 lakh liquor boxes a year, which means unlifted liquor cases will lead to a penalty. The penalty is ₹900 per case for Indian made foreign liquor and ₹3,500 per case for foreign liquor. In contrast, Punjab has an open quota with no compulsion.
Although the minimum retail price of liquor is less in Chandigarh as compared to Punjab last year, contractors say that liquor is significantly expensive in the city now.