The ''Special Corona Fee'' was imposed last month on the Maximum Retail Price of liquor bottle.
Liquor in Delhi will be cheaper from June 10 as the Aam Aadmi Party (AAP) government decided today to withdraw the 70-per cent "special corona fee" on its sale in the national capital, an official said.
The government, however, increased the Value Added Tax (VAT) on all categories of liquor from 20 per cent to 25 per cent from the said date, he added.
The decision was taken at a cabinet meeting chaired by Chief Minister Arvind Kejriwal.
The "special corona fee" on the Maximum Retail Price (MRP) of liquor bottles was imposed last month as the government, hit badly due to the coronavirus lockdown, looked to earn additional revenue.
According to the official, the government earned only Rs 235 crore from liquor, excluding the "special corona fee", last month.
The sale of liquor was allowed from May 4, when the third phase of the nationwide lockdown began. On May 5, the AAP government imposed the "special corona fee" on liquor.
According to the Confederation of Indian Alcoholic Beverage Companies (CIABC), there was a 58-per cent decline in the sale of liquor due to the "special corona fee" in the national capital in May.
"The sale of liquor was being affected due to the special corona fee and that is why the government has decided to withdraw it from June 10," another government official said.
Sources in the excise department said due to the higher "special corona fee", people were buying liquor from nearby cities, where it is cheaper.
CIABC director general Vinod Giri welcomed the Delhi government's decision.
"We welcome the decision of the government to remove the 70 per cent cess in Delhi. We had repeatedly pointed out that such a steep increase will turn out to be counter-productive as it would lead to a fall in liquor sales and government revenues."
"We are indeed very pleased to note that the government has responded promptly and appropriately to remove the cess and substitute it with a tax increase, which is reasonable and within our recommendations," he said.
"This once again demonstrates that the government is alive and sensitive to the interests of the state, industry, trade, and consumers and has the courage to take prompt action in the interest of all the stakeholders," Mr Giri added.
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