Puducherry is famous for its cheap ______, since the taxes on it are very low.
Puducherry is a Union Territory. Thus, a part of its budget and taxation is controlled by the central government. Liquor is a huge part of the economy and acts as one of the key drivers to the tourism industry of Puducherry. Thus, the taxes on liquor have been kept very low by the central government. Apart from liquor, the central government has reduced or removed the taxes on some other products as well to boost the economy of the small region.
Items listed under the State List of the Indian constitution vary in prices from state-to-state because of differential pricing and state-dependent taxes and other parameters. Liquor is also a part of the State List and thus it gets differential pricing across the states of India.
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