MAHARASHTRA EXCISE DEPARTMENT — OFFICIAL DOCUMENT ANALYSIS

Document Type: Government Resolution (GR) — Policy Amendment

Reference Number: GR No. SRVS 0521/Pr.Cr.61/RAUSHRU-2, dated 29 September 2021

Issued By: Government of Maharashtra, Home Department (गृह विभाग)

Effective Date: 01 January 2022

Summary:

This GR amends the State's policy on the mandatory use of grain-based alcohol (धान्याधारित मद्यार्क) in the production of domestic and Indian-made foreign spirits and beverages (IMFL). The amendment supersedes the GR dated 25 October 2021 and provides conditional relaxations from the 100% grain-based alcohol mandate for certain license categories. The policy aims to increase grain-based alcohol production capacity while ensuring adequate supply to distillers. The document addresses practical supply-side constraints faced by spirit manufacturers and provides limited relief through specified exemptions, effective from 1 January 2022.

KEY PROVISIONS:

Policy Framework & Objective:

• Earlier GR dated 25 October 2021 mandated 100% use of grain-based alcohol in manufacturing domestic and Indian-made foreign spirits from materials other than sugarcane residue and bagasse.
• Central Government has initiated a program to blend up to 20% alcohol with fuel and provides incentive rates for alcohol manufactured from sugarcane bagasse and molasses.
• Current GR amends the mandatory 100% requirement to address production capacity constraints and supply shortages.
• Effective date: 01 January 2022

Specific Regulatory Requirements:

1. For Distillers Manufacturing Spirits from Non-Grain Sources:

   • Manufacturers producing domestic and Indian-made foreign spirits from materials other than grain (e.g., molasses, bagasse) SHALL continue to use 100% grain-based alcohol — this requirement is retained and reinforced.

2. For CL-I (Country Liquor Class I) and PLL (Permitted Licensed Liquor) Distillers:

   • When manufacturing domestic and Indian-made foreign spirits from molasses-based alcohol:
     • Mandatory grain-based alcohol use reduced from 100% to 20% only
     • Distillers producing spirits using molasses-based alcohol must use minimum 20% grain-based alcohol in the final product going forward.

3. Rum Exemption:

   • Rum manufactured entirely from sugarcane molasses alcohol is EXEMPT from grain-based alcohol mandate.
   • Rum-based "Ready to Drink" (RTD) beverages are EXEMPT from grain-based alcohol mandate.
   • (Rationale: Rum and RTD rum products are inherently 100% molasses-based, making grain-based alcohol blending incompatible with product characteristics.)

4. Measurement & Compliance:

   • The prescribed proportion of grain-based alcohol shall be calculated on an annual basis (वार्षिर् प्रमाणानुसार).
   • Annual calculations supersede batch-wise implementation to avoid supply chain disruptions.

PRIOR CONTEXT & SUPERSEDED ORDERS:

Referenced Prior Government Resolutions:

1. GR dated 08 March 2000 (Ref: BPA 1097/17/EXC-3) — Original policy establishing mandate for grain-based alcohol use in spirit manufacturing.

2. GR dated 08 June 2007 (Ref: NMA 0206/Pr.Cr.3/RAUSHRU-2) — Announced "Grain-based Distillery & Alcohol Content Subsidy Scheme" (धान्याधारित आसवनी व एथेनॉल घटक अर्थसहाय्य योजना) to incentivize grain-based alcohol production.

3. GR dated 31 August 2009 (Ref: NMA 0309/Pr.Cr.75/RAUSHRU-2) — Made new grain-based distilleries established by 31 December 2009 eligible for subsidies.

4. GR dated 25 October 2021 (Ref: SRVS 0521/Pr.Cr.61/RAUSHRU-2) — THIS GR IS NOW AMENDED/SUPERSEDED — Original mandate requiring 100% grain-based alcohol use without exception.

5. Commissioner, State Excise letter dated 18 November 2021 (Ref: SRVS 112021/1228/49/Char) — Commissioner's formal recommendation proposing this amendment, citing:

   • Shortage of grain-based alcohol supply
   • Increased production costs for manufacturers
   • Risk of adverse impact on entire industry if mandatory 100% requirement enforced batch-wise
   • Request for waiver/relief on grain-based alcohol proportion

RATIONALE FOR AMENDMENT:

The Preamble documents:

• Supply Shortage Issue: Despite subsidy schemes, grain-based distillery capacity has not been fully utilized in Maharashtra.
• Central Government Incentive Program: Central Government incentivizes blending of up to 20% alcohol with fuel, creating competing demand for grain-based alcohol (especially from sugarcane bagasse and molasses sources).
• Industry Hardship: Batch-wise enforcement of 100% requirement would:
  • Create acute shortage of grain-based alcohol
  • Force manufacturers to procure from external/imported sources at inflated prices
  • Increase production costs and destabilize the spirits manufacturing sector
  • Adversely impact CL-I distilleries and small producers
• Practical Solution: Annual calculation basis with conditional relief to specific license categories.

LICENSE TYPES AFFECTED:

IMPORTANT NOTES / CONDITIONS / PENALTIES:

Conditions of Application:

1. Annual Measurement Standard: The 20% grain-based alcohol proportion for CL-I and PLL distillers shall be computed on a financial/calendar year basis, not batch-wise. This provides manufacturers certainty and avoids monthly/batch supply volatility.

2. No Retroactive Application: Amendment effective from 01 January 2022 onwards. Previous obligations under the 25 October 2021 GR are superseded from this date.

3. Rum & RTD Exception Clarity: The exemption explicitly states that rum's inherent composition (100% from sugarcane molasses) and RTD beverages' product formula make grain-based alcohol blending impractical and unnecessary. These categories are permanently exempt.

4. CL-I & PLL Limitation: The 20% relaxation applies only when these distillers manufacture spirits using molasses-based alcohol. If they manufacture from other sources, the original 100% requirement may still apply (document does not explicitly clarify this edge case, but implies it through the conditional "when using molasses-based alcohol" language).

5. Continued Subsidies: The Grain-based Distillery Subsidy Scheme (GR dated 08 June 2007) remains in force. Distilleries established by 31 December 2009 continue to be eligible.

DISTRIBUTION & IMPLEMENTATION:

Circular Distribution to:

• Chief Minister's Principal Secretary
• Leader of Opposition, Legislative Council & Assembly
• Minister/Deputy Minister (State Excise), Private Secretary
• Chief Secretary, Maharashtra State
• Principal Secretary (State Excise), Home Department
• Commissioner, State Excise, Maharashtra
• All District Collectors
• All Divisional Deputy Commissioners (State Excise)
• All Superintendents (State Excise)

Publication: Maharashtra Government portal — www.maharashtra.gov.in
Digital Reference Code: 202112291713350829
Authentication: Digitally signed by Sushilkumar Yadav, Additional Secretary, Home Department, Maharashtra Government

LEGAL STATUS:

• Issued Under: Authority of Governor of Maharashtra
• Signatory: Sushilkumar Yadav, Additional Secretary (अवर सचिव), Home Department
• Format: Official Government Resolution with full statutory force
• Archival Code: RAUSHRU-2 (संग्रहार्थक)

CRITICAL CLARIFICATIONS:

1. No Fee Changes: This GR does not impose new fees or modify existing license fee structures.
2. No New Forms: No new application forms or enclosures are introduced by this amendment.
3. Enforcement Mechanism: Amendment is self-executing; distilleries must ensure annual compliance by 31 December of each financial year.
4. Appeals/Grievances: Not specified in this GR; standard excise law grievance procedures under Bombay Prohibition Act 1949 and subordinate rules would apply.
5. Penalties for Non-Compliance: Not specified in this GR; applicable penalties under existing BPA 1949, BFLR 1953, and MCLR 1973 licensing suspension/cancellation provisions would apply.

Document Completely Analyzed & Extracted