Minister Vignesh allays fears of liquor price hike over new cess

CHENNAI: The retail price of liquor will not be increased on account of the newly introduced Environmental and Social Welfare Cess, Prohibition and Excise Minister K Vignesh told DT Next, clarifying that the Rs 10 cess proposed by the State government will be adjusted against the Rs 10 already collected under the bottle buy-back scheme.

The clarification follows the State government’s gazetting of an amendment providing for an Environmental and Social Welfare Cess of up to Rs 20 on each unit container of alcoholic liquor.

The provision was introduced through the Tamil Nadu Value Added Tax (Amendment) Act, 2026. Under this, the government can prescribe the cess based on the type and quantity of liquor and the nature of the container, subject to a maximum of Rs 20 per unit container. The levy is in addition to the existing VAT.

Vignesh, however, said the government would levy only Rs 10 as cess and adjust the amount against the Rs 10 already collected under the bottle buy-back scheme. “We’re collecting Rs 10 extra under the bottle buy-back scheme. The cess will be Rs 10 only, and not more than that. It will be adjusted against the Rs 10 already being collected. There won’t be any retail price hike in the near future just because of this,” the Minister told this correspondent.

Officials said that the existing Rs 10 collected separately for the bottle buy-back scheme would be incorporated into the MRP of the liquor. The government has also decided to hand over the responsibility of collecting, transporting and recycling empty bottles to the respective liquor manufacturers.

The new cess is intended to support recycling, safe disposal and reuse of liquor containers, rehabilitation and de-addiction programmes, welfare and livelihood support for families affected by alcohol addiction, awareness campaigns and ecological protection and restoration.

The Act defines a unit container as a bottle, jar, flask, pot, tin, can, tetra pack or similar receptacle designed to hold a specified quantity of liquor. The cess will not form part of taxable turnover and will come into force on a date to be notified by the government.