Amid mounting protest over the Revised Budget proposal to lower the tax on low-alcohol beverages, Chief Minister V.D. Satheesan on Wednesday (June 24) indicated that the final decision on the matter will be taken by the United Democratic Front (UDF).

During his reply to the general discussion on the Revised Budget in the State Assembly, Mr. Satheesan said the State government’s liquor policy is a “political decision” of the UDF. “We will discuss with everyone. We will have a draft, discuss with all the Front partners and then we will decide. If the UDF favours the sale of low-alcohol beverages, then these will be tax rates. If the UDF decides not to sell, then they won’t be sold. It is a political decision,” he said.

Mr. Satheesan’s remarks came amidst the protests raised by the Opposition Left Democratic Front (LDF) and reservations expressed within the UDF.

In the Revised Budget presented on June 19, the sales tax rate was pegged at 120% for alcoholic beverages with alcohol strength ranging from 0.5% v/v (volume by volume) to 10% v/v, and 175% for products with alcohol strength above 10% v/v and up to 20% v/v.

Mr. Satheesan said low-alcohol beverages as a new category was notified by the LDF government as part of its 2022-23 liquor policy. The present UDF government had merely fixed the tax rates. The LDF government had also amended the Foreign Liquor Rules to facilitate their sale, he said.

Mr. Satheesan alleged that the LDF government had planned to fix the tax rate between 86% and 116% – the tax rates of beer and wine. The LDF government had also fixed tax rates for foreign-made foreign liquor (FMFL), which had alcohol content between 40% and 60%, that were way lower than that of Indian-made foreign liquor (IMFL), he said.

The 120% and 175% now fixed by the UDF government, the Chief Minister said, are the highest for low-alcohol beverages among the States.

The LDF, which now exhibits distress over liquor addiction, had increased the number of bars in the State from 28, when it came to power in 2016, to more than 900, he said.