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Rethinking Liquor Laws in India: Taxation, Health, and Monopolies

Rethinking Liquor Laws in India: Taxation, Health, and Monopolies

Context

Recently, Delhi Chief Minister and some other leaders are behind bars because of corruption charges against them in liquor policy for Delhi.

Relevance For Prelims: Health, Role Of Government In Health, Goods And Services Tax (GST), Taxation In India, and Excise Duty On Industrial Alcohol.

Relevance For Mains: Issues with Liquor Laws in India. 

 

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Issues with Current Liquor Laws in India

  • Excessive Taxation: India’s liquor taxes are extraordinarily expensive, frequently exceeding 200% domestically and 150% for customs charges, burdening customers financially.
  • Impact on Health: High taxes encourage customers to buy lower-quality, cheaper alcohol, raising health hazards, particularly among low-income individuals.
  • State Revenue Dependence: States rely heavily on alcohol taxes for revenue, but Bihar’s prohibition demonstrates that alternatives exist for state financing.
  • Complicated Tax Structure: Liquor is not subject to the Goods and Services Tax (GST), which complicates the tax system. Including it could simplify taxation and bring it in line with other items like cigarettes.
  • Government Monopoly in Sales: Current rules frequently result in government monopolies on spirits sales, which can encourage corruption and create impediments for private firms.
  • Licence Requirements: The license requirements on serving liquor at eateries and social gatherings can be literally taxing, restrictive, and harassing.

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Conclusion

To cut red tape and encourage a more positive economic and social climate, licence requirements for the sale and consumption of alcoholic beverages in public areas should be made simpler.

Also Read: Direct Tax To GDP Ratio Rose To 15-year High In FY23

 

Prelims PYQ (2017):

What is/are the most likely advantages of implementing ‘Goods and Services Tax (GST)’? 

1. It will replace multiple taxes collected by multiple authorities and will thus create a single market in India. 

2. It will drastically reduce the ‘Current Account Deficit’ of India and will enable it to increase its foreign exchange reserves. 

3. It will enormously increase the growth and size of economy of India and will enable it to overtake China in the near future. 

Select the correct answer using the code given below: 

(a) 1 only 

(b) 2 and 3 only 

(c) 1 and 3 only 

(d) 1, 2 and 

Ans: (a)

 

Mains Question: Discuss the rationale for introducing Goods and Services Tax (GST) in India. Bring out critically the reasons for the delay in roll out for its regime. (200 words, 10 marks)

 

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NCERT Notes For UPSC UPSC Daily Current Affairs
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UPSC Mains Previous Year Papers UPSC Test Series 2024

 

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Download October 2024 Current Affairs.   Srijan 2025 Program (Prelims+Mains) !     Current Affairs Plus By Sumit Sir   UPSC Prelims2025 Test Series.    IDMP – Self Study Program 2025.

 

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Download October 2024 Current Affairs.   Srijan 2025 Program (Prelims+Mains) !     Current Affairs Plus By Sumit Sir   UPSC Prelims2025 Test Series.    IDMP – Self Study Program 2025.

 

Quick Revise Now !
AVAILABLE FOR DOWNLOAD SOON
UDAAN PRELIMS WALLAH
Comprehensive coverage with a concise format
Integration of PYQ within the booklet
Designed as per recent trends of Prelims questions
हिंदी में भी उपलब्ध
Quick Revise Now !
UDAAN PRELIMS WALLAH
Comprehensive coverage with a concise format
Integration of PYQ within the booklet
Designed as per recent trends of Prelims questions
हिंदी में भी उपलब्ध

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