Meghalaya govt reduces VAT on liquor by 2.5 percent

Syllad | The Rising MeghalayaFebruary 26, 2021

The Meghalaya Democratic Alliance government has decided to reduce the value added tax (VAT) on liquor by 2.5 percent.

“We have decided to reduce the VAT on different brands of liquor from 40 percent to 37.5 percent,” Deputy Chief Minister Prestone Tynsong told reporters after a cabinet meeting held on Friday.

He added that the government has also decided to revert back the lifting charge to Rs 2 from the 25 percent increase done in May, 2020.

Tynsong also informed that the loss of revenue due to reduction of VAT on liquor will be around Rs 80 – Rs 85 crore annually.

Asked, the deputy chief minister said the reason for the decision was after the price of liquor has drastically come down in the neighbouring state following Assam government’s decision to reduce the VAT on liquor.

“…the difference is not less than Rs 10 – Rs 30 (compared to Meghalaya), so ultimately we are bound to reduce it because if we don’t, then the turn over will also be reduced. Since we are living in a competitive world be it between state governments, we reduce the tax on liquor. We have calculated well and we ultimately came down to 37.5 percent,” he said.