Chennai, Sep 24 (NationPress) Liquor prices in Tamil Nadu are poised for an increase, as the Tamil Nadu State Marketing Corporation (Tasmac) prepares for a potential adjustment in pricing. This anticipated rise comes in light of the newly implemented Goods and Services Tax (GST) structure effective from September, which has elevated the financial burden associated with packaging and service in the liquor sector.

Although alcoholic beverages themselves remain outside the GST scope, the recent modifications under GST 2.0 have impacted associated inputs. Packaging items—such as bottles, caps, labels, and cartons—now incur an 18 percent tax, rising from the previous rates of 12 to 15 percent. Additionally, transportation and logistics services have also seen an increase, now taxed at 18 percent.

Because the liquor sector cannot claim input tax credits for materials and services utilized in alcohol production, these new taxes directly inflate costs for manufacturers and distributors.

Experts in the industry warn that these heightened costs are likely to be transferred to consumers, leading to higher retail prices.

With packaging and transportation constituting a substantial share of production and distribution costs, the revised tax structure is expected to significantly influence liquor pricing.

Tasmac, which monopolizes liquor retail in Tamil Nadu, is evaluating the ramifications of the updated tax regime and is set to make a decision after discussions with manufacturers and the State Finance Department.

The corporation currently offers 551 brands, including 302 spirits, 26 beers, and 223 wines, sold through 4,787 outlets and dedicated FL-11 shops throughout the state.

For the fiscal year 2024-25 up to March, Tasmac recorded a net revenue of ₹48,344 crore, solidifying its status as one of the largest revenue sources for the state government.

While a potential price increase might temporarily impact sales figures, officials express confidence that Tamil Nadu’s consistent consumption trends will likely keep revenues stable.

The state government is vigilantly observing these developments, balancing its reliance on excise and liquor taxes with consumer reactions to price shifts. Any price adjustment will directly affect household spending, especially considering the broad consumer base that relies on Tasmac outlets.

A formal update regarding revised pricing is anticipated in the upcoming weeks, following the completion of assessments. Until then, consumers may be apprehensive about rising costs during their next visit to a Tasmac outlet.