MAHARASHTRA EXCISE OFFICIAL DOCUMENT ANALYSIS

Document Type: Government Resolution (GR) / Policy Decision

Reference Number: MYS-0920/Pr.Cr.154/RAUSHU-2

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

Date of Issue: 23.06.2022 (23 June 2022)

Effective Date: From date of publication / As per subsequent Rules Amendment Notification (to be issued separately)

Official Portal ID: 1531

SUMMARY

This Government Resolution establishes a new excise policy permitting the production of alcoholic beverages (spirit/distilled liquor) from locally-available agricultural byproducts and fruits, and reclassifies certain spirit-based alcoholic beverages from "Domestic Liquor" (देशी मद्य) to "Foreign Liquor" (विदेशी मद्य) classification. The policy specifically authorizes production from cashew apple (काजूबोंडे), mohua flowers (मोहाफुले), and other perishable fruits/flowers (citrus, pomegranate, grapes, etc.) grown in Maharashtra. This is intended to create additional income sources for farmers, tribal populations, women's self-help groups, and generate employment in liquor production industries. Spirits produced from these sources will be classified as "Local Spirits" (स्थानिक मद्य) but carry the excise taxation and retail classification status of "Foreign Liquor" rather than "Domestic Liquor," enabling wider market access and higher consumer demand.

KEY PROVISIONS

I. RECLASSIFICATION AND NEW LICENSE FRAMEWORK

1. Reclassification of Spirit-Based Liquor:

   • Spirits (आत्म-मद्य/spirit) produced from cashew apple (काजूबोंडे), mohua flowers (मोहाफुले), and locally-produced fruits/flowers (केळी, मोसांबी, संत्री, द्राक्षे, डाळींब — i.e., banana, sweet lime, orange, grapes, pomegranate) shall henceforth be classified as "Foreign Liquor" (विदेशी मद्य) instead of "Domestic Liquor" (देशी मद्य).

   • These liquors shall be referred to as "Local Liquor" (स्थानिक मद्य) in nomenclature.

2. License Types Introduced / Modified:

   • "Sample-I" (नमुना-आय) Permit — for production of spirits from local fruits/flowers/agricultural byproducts.
   • "PLL" (पीएलएल) License — for production of beverage alcohol/drinkable liquor from the aforementioned spirits.

II. SAMPLE-I PERMIT (SPIRIT PRODUCTION)

3. Issuance:

   • Sample-I permits shall be granted for spirit (distilled liquor/आत्म-मद्य) production from locally-available fruits, flowers, and agricultural byproducts.

4. Fee Structure for Sample-I Permit:

   • License fee shall be equal to that levied on "Sample-I" permits for grape distillation (द्राक्ष रसाचे उध्वकपातन).
   • [Exact amount not specified in this GR; to be derived from existing BFLR or MCLR fee schedules]

5. Raw Materials Permitted:

   • Cashew apple (काजूबोंडे)
   • Mohua flowers (मोहाफुले)
   • Locally-produced fruits: Banana (केळी), Sweet Lime (मोसांबी), Orange (संत्री), Grapes (द्राक्षे), Pomegranate (डाळींब)
   • Any other locally-produced perishable fruits and flowers

6. Blending/Mixing Clause:

   • If fruit/flower availability is insufficient, spirits produced from one fruit/flower may be blended with spirits from another fruit/flower.
   • Prohibition: In no circumstance may grain or cereal-based spirits (मळी/धान्य-आधारित मद्य) be used to produce Foreign Liquor under these new permits. Grain/cereal-based spirits cannot be mixed into fruit/flower-based spirits.

III. PLL LICENSE (BEVERAGE ALCOHOL PRODUCTION)

7. Issuance:

   • PLL (Permitted Liquor License) permits shall be granted for production of beverage alcohol (पेय मद्य/drinkable liquor) from spirits produced under Sample-I permits.

8. Fee Structure for PLL License:

   • License fee shall be equal to that levied on "PLL" licenses for brandy (ब्रॅण्डी) produced from grapes (द्राक्षापासून तयार केलेल्या मद्याकावर आधारित ब्रॅण्डी).
   • [Exact amount not specified in this GR; to be derived from existing BFLR or MCLR fee schedules]

9. Retail License Restriction:

   • No FL-II (FL-2) retail/counter-sale license may be attached to or permitted for these PLL permits.
   • These spirits may be sold only through standard retail licenses: FL-II (नमुना एफएल-२), FL-III (एफएल-३), FL-IV (एफएल-४), and FL-IV-A (एफएल-4 अ).

IV. EXCISE DUTY / PRODUCTION TAX

10. Production/Excise Duty Rate:

    • Excise duty on beverage alcohol produced from locally-sourced fruit/flower spirits: ₹50 (Rupees Fifty) per Proof Liter

11. Excise Duty Formula:

    • The applicable formula shall be: Three times (3×) the production cost, OR ₹50 per Proof Liter, whichever is HIGHER.

12. Retail Maximum Price (MRP) Formula:

    • MRP shall follow the formula applicable to Indian-Made Foreign Liquor (IMFL) — i.e., the standard IMFL MRP calculation method.

V. RETAIL SELLING CHANNELS

13. Authorized Retail Licenses for Sale:
    • These "Local Liquor" beverages may be sold only through:
      • FL-II (नमुना एफएल-२) — Standard Foreign Liquor Retail License
      • FL-III (एफएल-३) — Restaurant/Hotel Foreign Liquor License
      • FL-IV (एफएल-४) — Club/Premises Foreign Liquor License
      • FL-IV-A (एफएल-4 अ) — Other Premises Foreign Liquor License

VI. ADMINISTRATIVE IMPLEMENTATION

14. One-Window Clearance Scheme:

    • All licenses and permits under this policy shall be granted under a "One-Window Scheme" (एक खिडकी योजनेमाफक) — i.e., single-window clearance for all approvals.

15. Rule Amendments Required:

    • The Government of Maharashtra shall issue separate Statutory Notifications/Rules Amendments to the Bombay Prohibition Act, 1949 (महाराष्ट्र दारुबंदी अधिनियम, 1949) and its subordinate rules to operationalize this policy.
    • These amendments will incorporate the license framework, fee structures, and operational conditions into the existing Rules.

OBJECTS AND REASONS (PREAMBLE POLICY RATIONALE)

The GR provides extensive policy justification:

A. Mohua Flowers (मोहाफुले) — Rationale:

• Mohua trees are found exclusively in the Indian subcontinent and grow abundantly in Maharashtra's forests.
• Import of mohua flowers is currently banned in Maharashtra.
• Despite low excise duty rates on mohua-based spirits, no producer was interested in manufacturing Domestic Liquor from mohua (due to limited consumer demand for the Domestic Liquor category).
• By reclassifying mohua-based spirits as Foreign Liquor, demand will increase.
• This will benefit tribal populations and generate additional income sources.

B. Cashew Apple (काजूबोंडे) — Rationale:

• Maharashtra is a leading state in cashew production in India.
• The cashew production process focuses only on the cashew nut; the cashew apple (काजूबोंडे) is wasted.
• By permitting spirit production from cashew apple byproducts, income sources will be created for:
  • Local farmers
  • Women's self-help groups engaged in cashew apple collection
• By-products from spirit production (animal feed, compost) will also benefit farmers and producers.

C. Other Fruits and Flowers (अन्य फळे/फुले) — Rationale:

• Maharashtra produces large quantities of perishable fruits (citrus, grapes, pomegranate, etc.).
• These fruits are lost to natural calamities and spoilage.
• Converting these into spirit-based beverages will:
  • Provide direct income to farmers
  • Create employment in the liquor production industry
  • Reduce agricultural waste

D. Taxation Efficiency — Rationale:

• Current Problem: Indian-Made Foreign Liquor (IMFL) attracts the highest excise duty rate among all alcoholic beverages.
• If the highest duty rate is applied to cashew/mohua spirits, retail prices become unaffordable, limiting market demand.
• Solution: Apply a concessional excise duty rate of ₹50 per Proof Liter on these fruit/flower-based spirits (significantly lower than standard IMFL duty rates) to enable:
  • Affordable retail pricing
  • Market competitiveness
  • Increased farmer income and liquor industry employment

DISTRIBUTION OF THIS ORDER

This GR has been circulated to:

1. Additional Chief Secretary to the Chief Minister, Office of the Chief Minister, Mumbai-32
2. Leader of Opposition, Legislative Council / Legislative Assembly, Vidhan Bhavan, Mumbai
3. Deputy Chief Minister / State Minister, State Excise, and their Private Secretary, Office of the Deputy Chief Minister / State Minister, Mumbai-32
4. Chief Secretary, Government of Maharashtra, Office of the Chief Secretary, Mumbai-32
5. Principal Secretary (State Excise), Home Department, Office of the Principal Secretary, Mumbai-32
6. Commissioner of State Excise, Maharashtra State, Mumbai-23
7. All District Magistrates
8. All Divisional Deputy Commissioners (State Excise)
9. All Superintendents (State Excise)
10. RAUSHU-2 Section (for archival)

WHO IS AFFECTED

Direct Beneficiaries:

• Farmers (local fruit/flower growers)
• Tribal populations (mohua-dependent communities)
• Women's self-help groups (cashew apple collection, agricultural activity)
• Spirit distillers/manufacturers (Sample-I permit holders)
• Beverage alcohol producers (PLL license holders)
• Liquor retailers authorized under FL-II, FL-III, FL-IV, FL-IV-A licenses
• Liquor consumers (increased product availability at regulated prices)

Regulated Entities:

• Existing distilleries seeking to diversify into fruit/flower-based spirits
• Existing beverage alcohol producers (PLL licensees) seeking to source from new suppliers
• Retail liquor licensees (FL-II, FL-III, FL-IV, FL-IV-A)

Excise Administration:

• State Excise Commissioner
• Divisional Deputy Commissioners (State Excise)
• District-level excise superintendents
• All excise enforcement and licensing authorities in Maharashtra

LICENSE TYPES AFFECTED / NEWLY INTRODUCED

Not Permitted Under This GR:

• FL-I (Export/Wholesale Foreign Liquor) — Not mentioned
• CL (Country Liquor) licenses — Not authorized for these products
• Toddy/Neera licenses — Not applicable

IMPORTANT NOTES / CONDITIONS / PENALTIES

A. MANDATORY RESTRICTIONS

1. Grain/Cereal-Based Spirit Prohibition (अनिवार्य निषेध):

   • Spirits produced from grain or cereal (मळी/धान्य) CANNOT be used under these new Sample-I / PLL licenses.
   • No mixing of grain-based and fruit-based spirits is permitted.
   • Violation: License revocation and applicable penalties under BPA.

2. No FL-II Counter-Sale License Attachment:

   • PLL licenses under this policy cannot have an associated FL-II retail license.
   • Products must be distributed through bulk/wholesale channels to authorized FL-II, FL-III, FL-IV, FL-IV-A retailers.
   • Violation: License revocation.

3. Blending Only Between Fruit/Flower Spirits:

   • Blending is permitted only among spirits derived from different fruits/flowers.
   • Example: Mohua spirit may be blended with cashew apple spirit if supply is insufficient.
   • Grain-based blending is absolutely prohibited.

B. OPERATIONAL CONDITIONS

4. One-Window Clearance:

   • All licenses must be processed through a single-window system, eliminating multiple approvals.
   • This is an administrative efficiency measure to reduce processing delays.

5. Rules Amendment Pending:

   • This GR is a policy framework only. Actual implementation depends on separate Statutory Rules Amendment Notifications to:
     • Bombay Prohibition Act, 1949 (महाराष्ट्र दारुबंदी अधिनियम, 1949)
     • Bombay Foreign Liquor Rules, 1953 (BFLR)
     • Maharashtra Country Liquor Rules, 1973 (MCLR)
   • These amendments will specify:
     • Exact fee amounts (indexed to existing Sample-I and PLL fees for grape distillation/brandy)
     • Detailed application forms and procedures
     • Inspection and compliance protocols

C. TAXATION PROVISIONS

6. Excise Duty Rate — LOCKED AT ₹50/PROOF LITER:

   • Minimum rate: ₹50 per Proof Liter (substantially concessional compared to IMFL rates)
   • Formula: 3× production cost OR ₹50/proof liter, whichever is higher
   • This ensures both affordability (for consumers) and viability (for producers)

7. MRP Calculation:

   • Must follow IMFL formula (न्याय-सम्मत मूल्य निर्धारण)
   • Transparent and published pricing required

D. POTENTIAL ENFORCEMENT & PENALTIES

(Inferred from BPA Section 57-60 and BFLR non-compliance provisions):

• Unauthorized use of grain-based spirits: License suspension/revocation + Fine up to ₹5,000–₹10,000 (depending on BPA severity)
• Unauthorized FL-II attachment: Immediate license cancellation
• Blending prohibition violation: Confiscation of stock + License revocation
• False declaration of source material: Prosecution under BPA Section 54-56
• MRP/tax evasion: Criminal prosecution under BPA Section 57

E. APPEALS AND GRIEVANCES

(Standard under Maharashtra Excise Law):

• Denial of Sample-I or PLL license → Appeal to Deputy Commissioner (Excise)
• Denial at Deputy Commissioner level → Appeal to Commissioner of State Excise
• License suspension/revocation → Appeal under BPA Section 27-A (if applicable)

EXCLUSIONS / NOT COVERED BY THIS GR

1. Grain/Cereal-Based Liquor: Existing rules for मळी/धान्य-आधारित मद्य remain unchanged.
2. Country Liquor (CL) Licenses: This policy does NOT extend to CL-I, CL-II, CL-III categories.
3. Domestic Liquor (देशी मद्य) Production: This policy specifically DISPLACES the Domestic Liquor classification — these are now Foreign Liquor.
4. Toddy/Neera Permits: Not affected; separate rules apply.
5. Export Licenses (FL-I): Not explicitly mentioned in this GR.
6. Manufacturing/Bottling Plants: Already covered under existing PLL rules; this GR extends the raw material base only.

DOCUMENT ACCESSIBILITY

• Official Publication: Available on Government of Maharashtra website: www.maharashtra.gov.in
• Portal Reference Code: 202206231116067729
• Authentication: Digitally signed by Sudhakar S. Yadav, Under Secretary, Home Department, Government of Maharashtra

NEXT STEPS FOR STAKEHOLDERS

For Potential Distillers/Producers:

1. Await Rules Amendment Notification — Sample-I permit application procedures, fee structure, and detailed eligibility criteria
2. Source Agricultural Materials — Establish supply chains for cashew apple, mohua flowers, or eligible fruits
3. Prepare Production Plans — Demonstrate capacity and intended output volumes
4. Apply through One-Window System — Submit applications once rules are notified

For Retail Licensees:

1. Update Inventory Systems — Prepare for new "Local Liquor" (स्थानिक मद्य) product categories
2. Train Staff — Educate on new products, MRP calculation, and compliance markers
3. Monitor Price Notifications — Await MRP guidelines from Excise Commissioner

For Excise Administration:

1. Draft Detailed Rules — Amendment notifications to BPA/BFLR/MCLR
2. Design Forms and Procedures — Sample-I and PLL application formats
3. Establish Inspection Protocols — Quality control, source verification, tax compliance monitoring
4. Set Up One-Window System — Integrate approvals across district and divisional offices

COMPLIANCE DEADLINE

No specific implementation deadline is stated in this GR. The policy becomes operational upon:

1. Publication of Rules Amendment Notification (to be issued separately)
2. Notification date of the Rules Amendment (effective date to be specified in the amendment)

END OF ANALYSIS