India, Sept. 16 -- In a recent meeting convened by deputy CM Ajit Pawar to discuss additional revenue sources in the wake of the rising fiscal deficit, the Goods and Services Tax (GST) department proposed a hike in the tax on liquor served in restaurants and hotels below the grade of 3 stars. Such places currently pay 5 percent, and the proposal is to up this to 10 to 15 percent, which will help the government increase revenue by Rs.300 to Rs.600 crore annually.

The GST department, which mopped up a revenue of Rs.2.02 lakh crore in 2022-23, stated that since 2011, there had been no tax hike on liquor served in restaurants and hotels below the grade of 3 stars, and thus there was scope for an increase. "Such hotels pay 5 percent value-add...