The Maharashtra government on Thursday hiked the production taxes on strong beer, but scaled down those of the mild ones.

The move follows the rising concern over the increase in consumption of strong beer compared to the mild variety due to similarity in prices.

Maharashtra Chief Minister Sushilkumar Shinde told reporters after a state Cabinet meeting that 60 per cent of the beer consumed in the state was of the strong variety, which contains 5 per cent to 10 per cent alcohol.

The consumption mild beer, with 5 per cent alcohol content, was comparatively less, he said.

Concerned over the situation, Shinde announced new production tax on mild beer at 75 per cent of the manufacturing cost (or Rs 12 per bulk litre), whichever was higher. The current tax is 100 per cent of manufacturing cost or Rs 16 per bulk litre.

For strong beer, the new production tax will be 100 per cent of manufacturing cost or Rs 20 per bulk litre, which ever is higher. Currently, production cost is Rs 18 per bulk litre.

The maximum retail price of mild beer would now be three times the manufacturing cost.

For strong beer, the MRP would be 3.5 times the manufacturing cost, instead of the current 3.25 times, he added.

The government also reduced the excise duty on export of beer from Rs 2 to Re 1 per bulk litre and increased the duty on imports from Rs 3 to 4 per bulk litre.

The state collected Rs 200 crore (Rs 2 billion) in revenue through taxes on beer last year.