Former Kerala Excise Minister Alleges Corruption Over Alcohol Tax Cut

Palakkad: Former excise minister MB Rajesh on Saturday criticised the UDF government's budget proposal to reduce taxes on low-alcohol beverages, alleging that the move would make alcohol more widely available and primarily benefit corporate liquor companies.

Addressing a press conference in Palakkad, Rajesh claimed that the tax reduction would pave the way for the large-scale sale of ready-to-drink alcoholic beverages in the state under the guise of low-alcohol products.

"The decision will facilitate the widespread availability of low-alcohol beverages across the state. Products that can be consumed like soft drinks, will become easily accessible through Bevco outlets," he alleged.

Rajesh further alleged that the move was aimed at benefiting liquor companies and questioned the rationale behind the tax concession. He also claimed that the decision would result in a revenue loss of around Rs 600 crore to the state exchequer.

The former minister alleged that the proposal was influenced by liquor industry interests and demanded that the government explain the basis for granting the tax relief.

Alleging that a Karnataka-based liquor lobby was behind the decision, Rajesh demanded that Satheesan clarify how much money had been received in connection with it.

"He only has to say how much (money) had been received," Rajesh said, targeting Satheesan.

Drawing a comparison with the previous LDF government's policy, Rajesh said the earlier administration had permitted the production of low-alcohol beverages from fruits and vegetables with the objective of supporting farmers and creating markets for agricultural produce.

He said such products were taxed at rates similar to wine and were intended to benefit the farming sector.

According to Rajesh, the new proposal would allow the manufacture of low-alcohol beverages using spirit, making them more commercially attractive for liquor companies.

He alleged that the measure would encourage greater alcohol consumption while extending benefits to a corporate player whose demand for tax concessions had earlier been rejected by the LDF government.

The criticism comes in the wake of the UDF government's budget proposal to reduce taxes on low-alcohol beverages as part of its broader revenue and industry policy measures.

The sales tax on low-level alcohol beverages in Kerala is set to be reduced from a flat rate of 251% tax to two new slabs, 120% for 0.5 to 10% alcohol beverages and 175% for beverages containing 10 to 20% alcohol; this will include most beer and wine varieties.