An autonomous research institute under the Ministry of Finance


Revenue Mobilisation from Taxes on Alcoholic Beverages

Publication date

Jul, 2024


NIPFP Working Paper No. 415


Sacchidananda Mukherjee and Shivani Badola


State excise, the third largest source of the state’s own tax revenue (OTR), is a crucial aspect of state finances in India. This study is important as it delves into the factors influencing state excise collection from alcoholic beverages. The tax base of state excise is the consumption of alcoholic beverages (viz., IMFL, country liquor, beer) and other narcotics (opium, Indian hemp, and other narcotic drugs and narcotics) in the state. Some states also collect sales tax on alcoholic beverages in addition to state excise. Combined revenue from the state excise and sales tax on alcoholic beverages constitutes a major share of the OTR. The tax administration of state excise is subject to complex processes and procedures. In this study, we provide a comprehensive summary of the regulatory structure of states related to State excise duties. 
Key Words: Revenue mobilisation, State Finances, Taxation of alcoholic beverages, State Excise, State Sales Tax, India.   
JEL Codes: H20, H71, H23, H26, I18. 
Acknowledgements: This study was made possible with the support of the Foreign, Commonwealth & Development Office (FCDO) of the Government of the United Kingdom. Dr. R. Kavita Rao's valuable comments and suggestions have greatly contributed to the depth and relevance of this research. 
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