Alcohol prices are set to rise across Maharashtra after the state cabinet approved several revenue-boosting changes in the excise department. This included a hike in duty on liquor that is expected to generate an additional Rs 14,000 crore in annual revenue. Excise duty will now be as high as 4.5 times the declared manufacturing cost for some products.
According to an official release, FL-2 (for sealed bottle) and FL-3 (on-premise sales) licences can now be operated through conducting agreements — subject to an additional 15% and 10% annual licence fee, respectively. The Maharashtra government has also approved the creation of of 1,223 new posts — 744 regular and 479 supervisory to strengthen the department. The release said these measures are expected to generate an additional Rs 14,000 crore annually in excise duties and related taxes.
How will prices change?
The newly unveiled policy will increase excise duties for Indian Made Foreign Liquor to 4.5x the manufacturing cost. The number is a significant jump from the 3x rate enforced till now with a ceiling of Rs 260 per bulk litre. Meanwile the duties on country liquor have also been raised from Rs 180 to Rs 205 per proof litre.
Revised minimum retail prices for 180 ml bottles have also been notified after the changes were announced. Under the revamped structure, premium foreign liquor will have a starting price of Rs 360, while country liquor incurs a charge of Rs 80, and premium foreign liquor begins at Rs 360. The state has also introduced a new category — grain-based Maharashtra Made Liquor that will be produced exclusively by local manufacturers. MML brands will require new registrations and retail with a starting price of Rs 148.
How do alcohol prices in other cities compare?
Karnataka currently has the highest liquor taxes in India with an 83% cess on the actual price. The state government also introduced a 5% additional excise duty on some products last month — making Bengaluru the costliest metro city for alcohol. Telangana follows closely behind with liquor prices determined by a combination of state excise duty, special excise cess, and government-controlled pricing. A government order in mid-May had also increased the retail price of select liquor brands by Rs 10 for a quarter bottle (180 ml), Rs 20 for a half bottle (360 ml), and Rs 40 for a full bottle (750 ml).
A rough comparison of prices indicates that Bengaluru and Hyderabad remain the costliest metro cities for alcohol with Mumbai following closely behind after the new taxes. A 180 ml bottle of Indian made foreign liquor now has a minimum retail price of 205 in Mumbai while it will cost approximately Rs 250 to Rs 300 in Bengaluru and Hyderabad. The price would be somewhat lower in Chennai (around Rs 140 to Rs 180) while alcohol remains cheapest in Delhi with IMFL priced roughly between Rs 120 and Rs 150 for the same quantity.