Maharashtra hikes liquor excise duty

In a significant policy shift aimed at addressing a mounting fiscal burden, the Maharashtra government has approved a steep hike in excise duty on alcoholic beverages and introduced a new grain-based liquor category. The move is expected to generate an estimated ₹14,000 crore annually for the state exchequer.

According to reports, the state Cabinet has raised the excise duty on Indian Made Foreign Liquor (IMFL) from three times to 4.5 times the declared manufacturing cost, capped at ₹260 per bulk litre. The duty on country liquor has also been increased, from ₹180-205 per proof litre.

In a bid to encourage local production, a new category, Maharashtra-Made Liquor (MML), has been introduced. MML will be grain-based and subject to fresh registrations, enabling new manufacturing units to operate under this category.

Retail prices have been revised accordingly: country liquor (180 ml) raised to  ₹80, up from  ₹70; MML (180 ml) caps at  ₹148; IMFL (180 ml) raised to  ₹205  from previously slated between  ₹110 and ₹115, and premium foreign liquor (180 ml)  hiked to  ₹360 from  ₹210.

A statement from the Chief Minister’s Office said the decisions were based on a high-level review of excise policies in other states, with an emphasis on improving licensing and tax collection frameworks.

To manage the expected rise in operational load, the state has approved 1,223 new positions in the excise department, including 744 regular and 479 supervisory roles.

The revised duty structure and MML framework are expected to be tabled during the upcoming legislative session.