Odisha unveils new three-year excise policy, adds de-addiction cess

Odisha's new three-year excise policy introduces a 0.5% de-addiction cess, tighter liquor controls, and reforms to improve transparency, compliance and revenue collection

In a significant departure from its earlier annual approach, the Odisha government on Thursday unveiled a new comprehensive three-year excise policy, signalling a shift towards transparency and tighter regulation.

 

Announcing the policy in the Assembly, Excise Minister Prithiviraj Harichandan said the three-year framework, which will remain in force from April 1, 2026, to March 31, 2029, aims to bring consistency and clarity in excise administration, while retaining flexibility for mid-course corrections if required.

 

With the new policy, the state government has introduced a 0.5 per cent ‘de-addiction cess’ on excise duty, acknowledging that alcohol consumption is a harmful habit. The proceeds from this cess will be ring-fenced for establishing and strengthening model de-addiction centres across Odisha, he said.

   

The new policy has imposed tighter controls on the expansion of liquor retail networks. No new OFF, country liquor (CL) or out-still (OS) shops will be permitted across the state. Opening of new ON shops in rural areas has also been barred, with limited exemptions granted only to three-star and above hotels and clubs located in industrial zones. The state BJP had promised in its 2024 election manifesto not to allow the opening of new liquor shops in Odisha.

 

Reflecting sensitivity to religious sentiments, the Odisha government has prohibited the operation of excise shops in the vicinity of the Shri Jagannath Temple and along the 2.6 km Badadanda (Grand Road) in Puri. Home delivery of liquor has also been completely banned under the new framework.

 

The government has also moved to shore up its revenues through a calibrated increase in fees and duties. Application fees for excise licences have been raised by 10 per cent, while licence fees will see an annual escalation of 10 to 20 per cent during the policy period. In addition, excise duties on Indian-made foreign liquor (IMFL) and country liquor have been increased. The state generates over ₹11,000 crore of excise revenue annually.

 

In a major structural reform, the policy has replaced the Minimum Guaranteed Quantity (MGQ) regime with a Minimum Guaranteed Excise Revenue (MGER) model. This is expected to protect government revenues while easing pressure on traders to push higher sales volumes to meet quantity targets. Officials said the new system would help curb unethical practices such as forced or shoddy sales.

 

On the manufacturing front, the policy has mandated modernisation of out-still units, including improved packaging and installation of quality control equipment. Compliance with Food Safety and Standards Authority of India (FSSAI) norms and pollution control regulations has been made compulsory. The government has decided to offer incentives to units that complete modernisation within stipulated timelines.

 

According to the policy, the Odisha government will roll out a comprehensive track-and-trace system to monitor the movement of extra neutral alcohol (ENA) and track every bottle from production to retail sale to strengthen enforcement and curb illegal trade.

 

“The state’s excise chemical laboratories will be upgraded with modern technology and trained manpower to improve testing and quality assurance mechanisms. All manufacturing units and retail outlets will be brought under CCTV surveillance, with real-time integration to the Excise Commissioner’s office and district authorities,” the policy stated.