Presently, alcohol has been kept out of the GST ambit since a constitutional amendment is needed to bring it under the new tax regime. Edelweiss Securities, a Mumbai based financial services company, believes that unless the government devises a mechanism for liquor companies to reimburse their irrecoverable taxes, the sector would be hampered by Implementation of GST.
Moreover, beer prices are expected to rise since it is believed that beer would be taxed at 18% rate. Presently, after paying all duties and taxes such as VAT, excise duty and sales tax, beer is charged at a rate between 12-15% depending upon the state. It is expected that the beer manufacturers would transfer the increased cost to their customers.