From April 1, booze served pubs, bars, and restaurant in Bengaluru was supposed to be cheaper as CM Siddaramaiah in his budget piece last month announced that value added tax (VAT) of 5.5 percent would be removed from the new financial year. 

 

However, the prices have not gone down and pub goers are still paying the same as before and in some cases, they are paying more than what they were paying before, according to a leading daily report. The reason behind the unchanged price is because the pubs, bars and restaurants are not passing the tax removal benefits to the customers despite making it a mandate under the new government policy.

 

Bars, pubs and restaurants are still selling the alcohol in old price though there is no VAT component on the bill due to which there is no change in the price of the drinks, the Times of India quoted Taxation committee chairman of Federation of Karnataka Chambers of Commerce and Industries (FKCCI), B T Manohar, as saying.

 

In fact, some of the places are selling liquor at higher rates than before leading to much confusion among diners and pub goers. 

 

The owners of pubs, bars and restaurants are arguing that due to hike in additional excise duty (AED) their cost of purchase has increased and so despite not charging VAT the liquor is costing higher for the customers. The owners are paying a hiked 6 percent to 16 percent AED to Karnataka State Beverages Corporation Limited (KSBCL).

 

Interestingly, though the microbreweries do not buy their beer from retail yet they are charging the same or in few cases, they are charging more than before, reported the daily.

 

Meanwhile, the excise deputy commissioner, AS Murali, was quoted as saying that the excise department is helpless as it has no saying over pricing of liquors in pubs, bars and restaurants. Removal of VAT has also rendered the commercial tax department helpless in this matter as now these places are out of this department’s purview.