How much does the government earn from a bottle of liquor?
There is such a network of tax collection in the country that from walking on the road to eating, you are contributing something to the government treasury on everything. And if you consume alcohol occasionally, then understand that you are one of the most important pillars that run the country’s economy. In fact, the revenue that state governments collect from the sale of liquor in the name of ‘Excise Duty’ is no less than a treasure for them.
A very large portion of the total revenue of many states, about 15% to 30%, comes from the sale of liquor alone. This is the main reason why any state government thinks a hundred times before taking big and economically risky decisions like liquor ban. Barring a few selected states, everywhere else such a heavy tax is collected on liquor that the state treasury is filled every year. Do you know how much tax is charged on a bottle of liquor and how much money the government earns from every bottle you buy? Come, let us understand this mathematics today.
The treasury of state governments is filling with liquor
Liquor sale is a mainstay of the economy of any state. If we look at the data, we will find that states like Uttar Pradesh, Karnataka, Maharashtra and Goa are at the forefront in terms of excise duty collection. The income from liquor tax in these states is very high.
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According to reports, in the financial year 2020-21, the country’s governments had earned a record-breaking amount of about Rs 1 lakh 75 thousand crore from excise duty, Among these states, Uttar Pradesh has gone ahead on the basis of its excise policy, During the financial year 2022-23, the Uttar Pradesh government had collected a huge revenue of Rs 41,250 crore from excise duty alone, Uttar Pradesh has received revenue of Rs 52,574,52 crore from excise in 2024-25, Excise revenue of Delhi government increased to approximately ₹7,766 crore in the financial year 2024-25, ,
After all, how much tax do you pay on a bottle?
Governments earn huge income from excise duty on the sale of liquor. But, the question that comes in the mind of a common man is that when he buys a bottle worth Rs 1000, how much money goes into the government’s pocket?
The simple answer is that each state government charges different tax rates. This is the reason why you can get the same brand of liquor cheaper in some states, while in some other states it is sold more expensive. Tax rates are decided by state policy makers. Apart from this, along with excise duty, many other charges are also levied on liquor, such as special cess, transport fees, labeling and registration charges etc. Combining all these charges, the final price of liquor is decided, the burden of which falls directly on the customer.
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Suppose you buy a bottle of liquor worth Rs 1000 from the market. So out of this one thousand rupees, how much amount goes into the government’s account? In fact, a large part of the price paid by customers, on an average 35% to 50% or even more, goes to the government coffers in the form of tax. Let us understand this with an example. If you buy a bottle of liquor worth ₹1000. So out of this, approximately ₹ 350 to ₹ 500 or even more is directly received by the state government as tax.