- Delhi liquor prices may rise due to new excise policy.
- Excise duty and retail margins are under review for changes.
- Policy aims to increase revenue and premium liquor availability.
Liquor prices in Delhi may rise in the coming months as the government’s new excise policy proposes changes to excise duty and retail margins, officials cited by The Indian Express said.
The policy, expected to be notified in October ahead of the festive season, aims to increase revenue and restructure the capital's liquor retail system.
A senior Delhi government official said, “The final draft of the new excise policy is ready.”
The proposal will be sent to the Delhi Cabinet and Lieutenant Governor Taranjit Singh Sandhu for approval after the appointment of a new excise commissioner. Delhi Excise Commissioner Ravi Jha was recently transferred to Arunachal Pradesh.
“Once a new officer is appointed, the final draft proposal will be sent to the Delhi Cabinet and Lieutenant Governor Taranjit Singh Sandhu for final nod. Once the approval comes, the government plans to notify it in October ahead of the peak festival season,” the official added.
Retail Margins, Excise Duty Under Review
The government is unlikely to allow private players in Delhi’s liquor retail sector. Instead, it is considering increasing fixed retail margins and revising excise duty slabs.
Currently, the retail margin is capped at Rs 50 per bottle for Indian Made Foreign Liquor (IMFL) and Rs 100 for foreign liquor.
Officials said the fixed margin system has affected the availability of premium imported liquor in Delhi, pushing customers towards neighbouring cities like Gurugram and Faridabad.
“Currently, the retail margin cap is fixed at Rs 50 on Indian Made Foreign Liquor and Rs 100 on foreign liquor on a per bottle basis.
The liquor shops in Delhi do not keep premium imported liquors that cost above Rs 1,000 due to a fixed margin, which eventually pushes the customers to neighbouring cities such as Gurugram, Faridabad where shops operate without a fixed margin,” the official said.
“For instance, let’s say the price of Black Label in Delhi is Rs 3,500, but you will get the same brand for a lesser price like Rs 2,400 in Gurgaon. This can be addressed once the fixed margins are removed,” the official added.
Excise Duty Hike May Push Prices Further
The government is also considering increasing excise duty as part of its revenue plans.
“Currently, excise duty in Delhi is levied according to different Wholesale Price (WSP) slabs and varies depending on the type of liquor. For instance, the duty on Indian spirits ranges from 30 per cent to 300 per cent. Any increase in these slabs is likely to raise the tax component of liquor prices…if excise duty is increased, the liquor prices will also increase,” the official explained.
Officials also indicated that liquor serving timings at hotels, clubs and restaurants could be revised under the new policy.
More Premium Liquor Stores Likely
The number of premium liquor stores in Delhi could increase under the proposed policy to improve availability of high-end brands in the city.
Vinod Giri, Director General of the Brewers Association of India, said changes in retail margins should be considered carefully.
“Retail margins are currently fixed on a per-bottle basis, regardless of the price of the bottle. For Scotch whiskies, for instance, it is around Rs 100 per bottle and then comes down to Rs 50 and so on. The question is what margin they will allow under the new policy. Margins of 5 per cent, 10 per cent or 15 per cent are generally the norm. There should not be an objection if the margin is up to 10 per cent; anything substantially higher could raise questions,” he said.
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Delhi currently has more than 700 liquor shops operated by four government corporations. The city returned to the previous excise policy after the earlier liquor policy introduced by the AAP government was scrapped following CBI and ED investigations.
Chief Minister Rekha Gupta had earlier announced plans to introduce a new excise policy and formed a ministerial committee headed by Minister Parvesh Sahib Singh to prepare a “transparent and socially secure” policy.