In a major policy shift aimed at increasing state revenue, the Maharashtra cabinet on Tuesday approved a steep hike in excise duties on Indian Made Foreign Liquor (IMFL), country liquor, and imported alcoholic beverages. Alongside this decision, the government also announced the creation of a new category—Maharashtra Made Liquor (MML)—targeted at bridging the gap between affordable and premium alcoholic products.
The revised structure raises the excise duty on IMFL by 50%, moving from three times the manufacturing cost to 4.5 times, particularly impacting products priced at ₹260 per bulk litre. Country liquor will now attract a duty of ₹205 per proof litre, up from ₹180. The move is projected to generate an additional ₹14,000 crore annually in excise revenue.
As a result, retail prices of alcoholic beverages are set to rise sharply. A 180 ml bottle of country liquor is expected to cost at least ₹80, up from the current ₹60–₹70 range. The price of IMFL may increase to ₹205, and premium foreign liquor brands could see prices spike to ₹360, from the earlier average of ₹210.
Additionally, the state has approved a policy change allowing liquor retail (FL-2) and on-premise sale (FL-3) license holders to operate under a lease model. This will attract an extra 15% and 10% charge, respectively, on the annual licence fee.
The newly introduced Maharashtra Made Liquor (MML) will be made from grain-based spirits and will only include products manufactured and registered within the state. National and international brands will not be eligible. While MML will follow a tax structure similar to that of country liquor, it will be sold only through FL-2 and FL-3 licensees.
Officials estimate that this new category could expand from its current 5–6 crore litre market to around 10–11 crore litres, contributing up to ₹3,000 crore in additional income. The government also believes the measure will benefit local grain farmers, by increasing demand for raw materials.
A senior excise department official noted that 38 of the state’s 70 licensed alcohol producers are currently inactive due to stiff competition from larger brands. “The MML initiative is designed to revitalize local manufacturing and provide a competitive edge to domestic players,” the official said.
However, the decision has sparked concern among industry stakeholders. Experts warn that the substantial tax hike could encourage alcohol smuggling from neighboring states with lower excise rates. “Maharashtra was already among the highest taxed regions for liquor in India. These changes could further strain the market and drive illegal trade,” an industry representative stated.
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