 "Diageo, alcohol, liquor")
Alcohol companies are awaiting more details and an official clarification after the Maharashtra cabinet approved revenue-boosting changes in the excise department, including a sharp liquor duty hike.
According to the cabinet's decision, the excise duty on Indian Made Foreign Liquor will be raised from three times to 4.5 times the declared manufacturing cost (up to ₹260 per bulk litre), while duty on country liquor will rise from ₹180 to ₹205 per litre.
The move, aimed at increasing state revenues, was announced in a notification on Tuesday.
The government said that a secretary-level study group had been formed to explore ways to boost revenue from the excise department.
“It studied the best practices and policies from other states in areas such as liquor production policy, licensing, excise duty, and tax collection, and submitted its recommendations to the government,” the notification read.
Executives from several alcohol firms, who spoke to Business Standard on condition of anonymity, said they are waiting for the official gazette notification for clarity on the changes and their implementation.
Sanjit Padhi, CEO of the International Spirits and Wines Association of India (ISWAI), expressed concern over the impact of the proposed hike on the industry’s efforts toward premiumisation.
“While we understand the state's need to raise revenues, such steep hikes risk pushing consumers towards lower-quality, cheap alternatives. We urge the government to explore more balanced, long-term revenue strategies that do not compromise consumer choice or quality,” Padhi said.
The notification excludes beer and wine from the revised excise duty structure.
“Due to the increase in excise duty rates and the corresponding change in the MRP formula, the minimum retail price of a 180 ml bottle is as follows, type-wise: Country liquor ₹80, Maharashtra Made Liquor ₹148, Indian-made foreign liquor ₹205 and Premium brands of foreign liquor ₹360,” it said.
The notification also said MML has been approved to manufacture a new type of grain-based foreign liquor. Only liquor manufacturers in Maharashtra will be able to produce this type of liquor. They will be required to get a new registration for this new type of product.
“We are glad to note that the Maharashtra government is taking the corrective action by not increasing excise duty on beer any further. This move will help correct the relative pricing between liquor and beer, be more socially responsible, and bring growth back in the beer sector. Brewers have already invested ₹3,500 crore in breweries in the state providing jobs to 3,500 people, and are committed to making fresh investments if a conducive regulatory environment is created for beer.” Vinod Giri, director general, Brewers Association of India said.
