No compromise: Kerala's draft finance bill holds ground on low-alcohol tax slabs

THIRUVANANTHAPURAM: Standing its ground amidst brewing controversies, the Kerala government is moving ahead with its decision to grant tax concessions for low-strength alcohol. The proposed tax relief, which was initially announced in the state budget, has been officially retained in the draft Finance Bill.

The drafts of the Finance Bills, necessary for implementing the new budget proposals, have been printed and distributed to the Members of the Legislative Assembly (MLAs) after obtaining the Governor’s formal approval. Highly placed sources confirm that the draft incorporates two distinct tax slabs tailored specifically for low-alcohol beverages.

Under this newly proposed structure, the tax burden on milder beverages will be significantly lower than that on stronger spirits. Specifically, beverages with an alcohol content of up to 10% will attract a tax rate of 120%, while those containing up to 20% alcohol will be taxed at 175%. This marks a substantial departure from the current fiscal regime in the state, where Indian-Made Foreign Liquor (IMFL) faces a steep tax rate of 251%.

Once the Legislative Assembly gives its stamp of approval to the Finance Bills, the state’s existing tax laws will automatically adjust to mirror these changes, eliminating the need for any separate legislative procedures. This legal amendment will clear the deck for the sale of low-strength liquor at the newly reduced rates across the state.

The state assembly is scheduled for a short, three-day session commencing this Monday. The Business Advisory Committee, under the leadership of the Speaker, will map out the precise legislative calendar, including the introduction of the bills, their referral to the Subject Committee, and the final voting process. Given the current political momentum, the government is highly likely to complete all necessary formalities and pass the bill by Wednesday.