ISWAI sues Maharashtra over new liquor policy

The International Spirits and Wines Association of India (ISWAI), representing global players such as Diageo and Pernod Ricard, has filed a petition against the Maharashtra government challenging its recent liquor tax restructuring, reported Reuters.

The industry body has argued that the state’s move to sharply raise taxes on several popular affordable brands while reserving a lower-tax category exclusively for certain local manufacturers has created an uneven market.

According to the report, Maharashtra, one of India’s most significant alcohol markets, accounting for around 7 percent of the country’s premium liquor consumption, rolled out a new policy between June and August aimed at driving local investment. The policy created a “Maharashtra Made Liquor” category, available only to manufacturers headquartered in the state with no foreign investment, allowing them to sell products at a 270 percent tax rate.

Meanwhile, taxes on other premium brands in the affordable segment, with a production cost below ₹260 per litre, were increased from 300 percent to 450 percent. The brands affected include Diageo’s McDowell’s, Pernod Ricard’s Royal Stag, Tilaknagar Industries’ Imperial Blue and Allied Blenders and Distillers’ Officer’s Choice.

ISWAI stated in its November 14 court filing, reviewed by Reuters though not publicly accessible, that the state’s framework “has sought to grant an artificial competitive advantage to the preferred class.” The association has urged the Bombay High Court to either strike down the policy or allow companies with foreign investment to participate in the lower tax bracket. The case is scheduled to be heard on December 9.