Shimla: In a bid to check smuggling of liquor from neighbouring states and increase revenue, the Excise Department in Himachal Pradesh has proposed to reduce rate of value added tax (VAT) on Indian made foreign liquor.

Tipplers can cheer on this move as a cut in VAT rate is expected to make alcoholic drinks cheaper in the hill state. The Excise Department has proposed a reduction of 3-4 per cent in VAT rate, besides increasing the supply quota of contractors, among others, sources in the department said today. At present, 20 per cent VAT is imposed on liquor in the state.

The Prem Kumar Dhumal government is expected to give a green signal to the proposed changes, which form a part of the new Excise Policy, in the state cabinet meeting scheduled at Dharamsala tomorrow. Due to higher prices of liquor in the hill state, there had been reports of smuggling of the same from neighbouring Punjab and Haryana where VAT on it is only 4 per cent.

The liquor traders of HP have repeatedly been demanding reduction on VAT in the state. The state government could also increase liquor quota of the contractors to enhance their supply, the sources said.

Source : PTI