While the Punjab government’s significant reduction in the rates of alcohol served in hotels and resorts for wedding functions has brought relief to patrons, alcohol consumption during these functions will likely increase even more.
On the other hand, a side effect of this is that owners of marriage palaces, hotels, and resorts will have to remain vigilant and cautious, as alcohol consumption during the function will determine GST collection against the strength of the function, guest attendance, and catering capacity.
If we compare it to the past, the prices at which alcohol will now be available to the host of the function will steadily increase the consumption of alcohol at each function. Experts in this field say that due to the high cost of alcohol, families organizing functions have been purchasing only a nominal amount of alcohol during their functions. The reason is that the alcohol budget used to surpass all other wedding expenses. For example, if a function had more than 500 people, the cost of purchasing alcohol often exceeded the organizer’s capacity. As a result, the organizer either purchased cheap liquor for his function and reduced the quantity, or had to compromise on quality for his family. Struggling with these circumstances, he had to limit his alcohol budget.
Those in the hotel and catering profession say that the list of liquor rates released by Excise Department Commissioner Jitendra Jorwal (IAS) will now increase the cost of liquor accordingly, benefiting both liquor contractors and the government. The reason is that the organizer will now freely purchase alcohol for his function.
The government’s GST There will be an increase
It’s important to note that if alcohol is sold at the new rates, hosts will invite more people to functions, which could lead to a significant increase in catering costs. This will directly benefit the GST department, as the increase in catering will lead to higher GST.
Both the government and liquor contractors will benefit!
Experienced individuals involved in the liquor business say that if alcohol is sold this way, sales will increase, benefiting liquor contractors and generating greater excise revenue for the government. According to business rules, the higher the sales, the higher the revenue.
If catering is shown to be low… alcohol consumption will be exposed!
Due to the cheapness of alcohol, wedding functions will increase. It was observed that in the past, weddings and receptions were held in palaces, hotels, and resorts, while other functions were held at home. According to the new system, if liquor is available at these prices, then even small and low-budget functions will be organized in banquet halls, clubs, big restaurants, etc.
On the other hand, the Punjab government will get an additional 18 percent GST on catering at these places. The government will only know about this when it sees how much liquor was consumed in this function? And how much tax was collected from catering. On the other hand, if the consumption of liquor is more and the catering bill is less, then the manager of the hotel/resort or function venue will immediately come under the legal purview of the GST department.
