Tamil Nadu protecting liquor tax base from ethanol competition

January 5, 2016 |

In India, Tamil Nadu is working hard to protect its liquor industry that fills its coffers with tax revenue by ensuring that sugar mills are extremely limited in producing ethanol for transport. To achieve the mandated 5% ethanol blend, the state should have supplied 47 million liters but mills were only allowed to supply about 6% of that, far below other states and significantly limiting recovery opportunities for struggling sugar mills. Taxes on liquor account for about a third of the state’s annual tax revenue.

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Category: Policy

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