Tax evasion is a major problem in India. Bloomberg Businessweek reported that the country loses approximately $314 billion as a result of tax evasion. By requiring all distilleries and shops to have barcode tracking software and barcode readers, government officials hope to better keep tabs on shipments. The system should ensure that inventory matches sales and that no company is circumventing tax requirements, according to The Daily Mail.
"Our revenue will certainly go up by the end of this financial year," a city official said to The Daily Mail. "There have been cases where liquor from other states with low duty were bought and sold in the city without permit. For instance, Haryana levies lower duty on liquor as compared to Delhi. There is a difference of nearly Rs 1,000 in the duty to be paid on liquor in two states."
The move will help officials fill government coffers as well as help to protect consumers against the dangers of bootleg alcohol. According to the BBC, illegal liquor is common in India, but its consumption has frequently lead to death and widespread illness. In 2011, 143 people in the state of West Bengal died after drinking toxic liquor, and 107 people perished in Gujarat in 2009 from bad alcohol, for example. The problem has become so pervasive that Gujarat officials in 2011 made the sale and manufacturing of illicit alcohol punishable by death.
How Delhi's Barcode Tracking System Will Work
The tracking program, which is set to begin on February 15, will use barcode labels to increase transparency both for manufacturers and consumers. According to The Daily Mail, distilleries and other official alcohol producers will be assigned a unique barcode label to affix to their shipments. In addition, manufacturers will send their alcohol to a government-owned warehouse for tracking and logging before the package heads to stores.
The system will help Delhi's liquor customers in a number of ways. For one, seeing a barcode label on a bottle will show that it came from a licensed facility. In addition, the news source reported that barcode scanning stations will be set up at numerous stores throughout the city, so that consumers can scan the barcodes and bring up more information about the liquor they are purchasing. To top it all off, Delhi officials said that this program was cost effective to implement, so the government does not plan to raise taxes to pay for the system.