Liquor vend auction: Flop show continues, Chandigarh admn slashes reserve price further
Only five of 41 unsold liquor vends auctioned in third round despite slashing reserve price by 3% to 5%; another auction planned on March 31 with reserve price lowered further by 6% to 10%
UT excise and taxation department’s third attempt to auction unsold liquor vends in the city came a cropper, as only five of the 41 vends found buyers despite slashing the reserve prices by 3% to 5%.
While the revenue earned was being calculated by the department at the time of going to press, officials said the five vends auctioned were located in Sectors 24, 34, 40-C, and Maloya and Manimajra.
Staring at a significant revenue deficit in 2023-24 if all 95 vends are not allotted, the department has now slashed the reserve prices further by 6% to 10% for the fourth round of auction that will be held on March 31, the last day of the current fiscal.
Through the first two auctions, held on March 15 and 21, the department had managed to auction only 54 of the 95 liquor vends in the city. Therefore, the department had planned the third round of auction for the 41 unsold vends and reduced the reserve prices by 3% to 5%.
UT adviser Dharam Pal said, “We will again hold an auction on March 31 after slashing the reserve price further. The auctions will continue till all vends are allotted.”
For financial year 2023-24, the excise and taxation department has fixed a target of ₹830 crore for liquor vends’ licence fee. But from first two auctions, it has earned only ₹276.4 crore, leaving a revenue gap of ₹553.6 crore.
Last year, the department had to hold seven auctions and still could not sell three of the total 96 vends.
‘UT excise policy not friendly’
On the other hand, liquor contractors say for the first time, the Punjab excise policy was more friendly than that rolled out by Chandigarh.
Darshan Singh Kler, owner of Kler Wines, who bought six liquor vends in the auction held on March 15, said, “The administration is focusing on marginal reduction in reserve price, while the contractors are primarily concerned about losses through the financial year due to the clauses of the UT excise policy.”
A liquor vend contractor, who didn’t wish to be named, said, “I have invested in Punjab due to negligible VAT, which is 1% of the ex-distillery price (EDP). This means that VAT on a ₹1,000 bottle is just ₹10. Whereas in Chandigarh, they charge a significantly higher 12.5% VAT, which translates to ₹125.”
Another reason for contractors’ exodus from Chandigarh was the excise fee, he said: “In Punjab, the excise fee is just 1%, while in Chandigarh it ranges between ₹445 and ₹3,500 per case.”
The contractors also blamed UT for fixing quota at 18 lakh liquor boxes a year, which means unlifted liquor cases will lead to a penalty. The penalty is ₹900 per case for Indian made foreign liquor and ₹3,500 per case for foreign liquor. In contrast, Punjab has an open quota with no compulsion.
They have also cited the higher licence fee in Chandigarh for the poor response, which is ₹6 crore on an average compared to ₹1.5 crore to ₹2 crore in Punjab.
Contractors say they had pointed these factors out to the UT administration while the excise policy was being formulated, but officials did not pay heed to their demands.
