Karnataka has incurred a loss of Rs 1,551 crore in excise duty due to restricted liquor sales between April and August as compared to the previous year, despite a significant spike in excise duty since May.

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The state has now allowed restaurants, pubs, bars and clubs to serve alcohol starting September 1, which is likely to push up revenues for the exchequer.

Karnataka had completely stopped alcohol sale in March when the nationwide lockdown was announced, and continued with the ban through April, thus seeing zero revenues on excise duty.

The state then decided to allow the sale of liquor through MRP outlets in May, and also allowed bars and restaurants to clear their stock.

Liquor sales have picked up steadily since May, and in fact, since June, monthly revenues for the state excise department has been higher than the corresponding months of last year. This was also aided by the hike in excise duty of 11 percent brought in May, which was in addition to the 6 percent on Indian Made Liquor that was brought in during the state budget in March.

For example, in June, the Karnataka excise department saw revenues of Rs 2,459 crore, compared to Rs 2,404 crore in June last year. In August, revenues from liquor sales stood at Rs 1,828.9 crore, compared to Rs 1,684 crore in August of last year.

However, since the state had seen no revenues from liquor sales in April and limited revenues of Rs 1387 crore in May, the overall revenue deficit for the state excise department between April and August stands at Rs 1,551 crore compared to the revenues it earned in the same period last year.

For restaurants and pubs, the permission to now serve liquor at their premises has pushed up hopes that customer footfall would also increase, which has been dismal even though dining-in was allowed since June 8.

“When restaurants were opened for dining in, we had 20-30 customers in a day. Over the last few weeks, we have been seeing 200 customers on weekends. “With alcohol being served we should have more customers coming in,” said Mukesh Tolani, cofounder and director, Ph4 Food and Beverages, which runs the popular Toit pub in Bengaluru and other cities.

Tolani, however, said that the restriction of 50 percent seating capacity could continue to play a dampener.

At the time of the lockdown, Toit was sitting on 20,000 litres of stock, which it was allowed to sell as take-away since May.

However, sales have been nowhere near the 800-900 litres a day that the pub would see on average before COVID outbreak, with Toit seeing take-aways of 150-200 litres a day on an average.

The takeaways from pubs and restaurants have now been stopped as they have been allowed to serve liquor to customers walking in.

The lockdown and the restriction on liquor sales have weighed heavily on the 4000 odd restaurants and bars in Bangalore that serve liquor, with the Karnataka Hotels Association estimating that nearly 20 percent of these are shutting down because of poor business during the last few months.