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Key Points

The Maharashtra Cabinet has approved a new grain-based alcohol category called Maharashtra Made Liquor (MML) to support local manufacturers. Excise duty on Indian Made Foreign Liquor (IMFL) has been increased by 50%, raising prices significantly. The move aims to boost state revenue by Rs 14,000 crore annually while ensuring better prices for farmers. Industry experts, however, have raised concerns over the tax hike's impact.

Key Points: Fadnavis Cabinet Approves Maharashtra Made Liquor and IMFL Tax Hike

  • Maharashtra introduces grain-based MML to bridge market gap
  • IMFL excise duty hiked to 4.5x manufacturing cost
  • Alcohol prices to rise by 50% in the state
  • New policy aims to generate Rs 14,000 crore in revenue
3 min read

Maha Cabinet approves grain-based alcohol, hike in excise duty on IMFL

Maharashtra hikes excise duty on IMFL by 50%, introduces grain-based MML to boost state revenue and support local manufacturers.

"Maharashtra has a total of 70 licenses for alcohol manufacturers. Out of these, 38 are non-functional as they cannot compete with foreign companies which control 80% of the market. — State Excise Department"

Mumbai, June 10

The Maharashtra Cabinet chaired by Chief Minister Devendra Fadnavis, on Tuesday, gave approval for the launch of a new category of Maharashtra Made Liquor (MML) and also cleared hike in the excise duty on Indian Made Foreign Liquor (IMFL).

This is expected to increase the annual excise tax collection by Rs 14,000 crore.

The prices of IMFL and foreign premium brands in the state are likely to increase by at least 50 per cent due to the hike.

The industry experts have however questioned the move of increasing taxes.

The state government has also cleared the decision to allow running FL 2 (vendor license for foreign liquor) and FL 3 (Licence for sale at restaurant or hotel of imported and IMFL on which Excise Duty has been paid) establishments on lease at 15 per cent and 10 per cent additional cost of annual license fee, respectively.

The hike in excise duty on IMFL from existing three times of manufacturing cost to 4.5 times is set to raise the cost of alcohol in the state by nearly 50 per cent.

This will be applied to those IMFL which have the manufacturing cost at Rs 260 per bulk litre.

The excise of Rs 180 per proof litre of country liquor has also been increased to Rs 205.

The term 'proof litre' refers to a unit of measure that accounts for the alcohol content of a beverage. This will lead to the increase in minimum existing MRP cost of 180 ml bottle.

For country liquor the excise will Rs 80 (current around Rs 60-70); for IMFL Rs 205 (current Rs 115-130) and for foreign premium brand it will be Rs 360 (current Rs 210).

An official said that last time when the state government increased the excise was in 2011 and it has now been done after a gap of 14 years, said the government in a statement.

The introduction of MML creates a new category in currently existing alcohol sections which will be cheaper than IMFL but costlier than the country liquor.

"Maharashtra has a total of 70 licenses for alcohol manufacturers. Out of these, 38 are non-functional as they cannot compete with foreign companies which control 80 per cent of the market. The MML category aims at filling this gap," said a senior official from the State Excise Department.

The MML category will have grain-based alcohol and the brands will have to be registered in Maharashtra. No existing brands from outside can be part of this category. The MML will have a tax structure of country liquor but will be available only in FL II (vendor license for foreign liquor) and FL III (Licence for sale at restaurant or hotel of imported and IMFL on which Excise Duty has been paid).

States like Uttar Pradesh and Rajastan have already created such a category.

"According to our estimate, the present segment is of around 5 to 6 crore litres and it may grow to 10 to 11 crore litres. We expect to earn a revenue of Rs 3,000 crore out of this," said the official.

He added that being grain-based alcohol, the MML category will also ensure better prices for farmers, apart from increase in state revenue.

- IANS

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Reader Comments

R
Rahul K.
Good move by Maharashtra govt to support local manufacturers with MML category! 🎉 Foreign brands dominate too much. This will create jobs and help farmers too. The tax hike might pinch but it's been 14 years since last revision - inflation affects govt expenses too.
P
Priya M.
50% price hike is too steep yaar! IMFL was already expensive. Now middle-class people will suffer while rich will keep buying foreign brands. Government should have phased the increase gradually instead of one big jump.
A
Amit S.
Grain-based alcohol is a smart idea - supports our farmers and reduces dependency on imports. UP and Rajasthan have shown the way. Hope Maharashtra's MML maintains good quality standards unlike some country liquors.
S
Sunita P.
While revenue generation is important, has the government considered how this will affect tourism? Mumbai/Pune's nightlife and hotel industry might take a hit if alcohol becomes too expensive for visitors. Need balanced policies.
V
Vikram J.
Rs 14,000 crore additional revenue is no joke! This money better be used for public welfare - roads, hospitals, schools. Government must show transparency in how these funds are utilized. No more corruption please!
N
Neha T.
As someone from rural Maharashtra, I welcome the grain-based alcohol plan. Farmers need more income sources. But government should ensure proper implementation - middlemen shouldn't eat up all the profits meant for farmers.

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