Tax Policy on Alcohol

Tax Policy on Alcohol
India

The below version control table serves to document all updates made to the report. The purpose is to ensure the information is always accurate and up-to-date.

1. General Requirements on Tax Policy for Alcohol Goods

India's tax policy on alcoholic goods, including beer, whisky, and Ready-To-Drinks (RTDs), is complex and comprises multiple layers of taxation at the central and state levels. 

A) Central level rule 

The rules and regulations [2] on the Central Board of Indirect Taxes and Customs (CBIC) portal are managed by the CBIC authority, which operates under the Department of Revenue, Ministry of Finance, Government of India. 

CBIC is responsible for the administration of Goods and Services Tax (GST), customs, central excise, and service tax laws in India. The CBIC offers a comprehensive resource for tax-related information through its official portal, accessible at taxinformation.cbic.gov.in [3]. 

This platform provides detailed guidelines, notifications, circulars, and updates on indirect taxes, including customs, GST, and excise duties, facilitating compliance and awareness for businesses and individuals. 

The taxes most relevant to alcoholic beverages are: 

• Excise Duty: Alcohol taxation falls under state excise departments, varying widely by state. 
• Customs Duty (Imports): Imported alcohol is taxed under the Customs Tariff Act, including: 
  • Basic Customs Duty (BCD)
  • Additional Customs Duty (like excise) 
  • Social Welfare Surcharge (SWS) 
  • Example: Spirits like whisky face duties up to 150% 
• Value-Added Tax (VAT): Most states levy 5–20% VAT or equivalent on alcohol sales, varying by state. 
• Federal Goods and Services Tax (GST) - is a comprehensive destination-based tax levied on the supply of goods and services in India. It is designed to subsume various indirect taxes such as VAT, excise duty, and service tax into a single unified tax system. Exclusion: Alcohol is exempt from GST, instead states implement their own tax on alcohol including VAT, excise, and surcharges. 

B) State levels rule 

The rules are managed by the local states. Local states may impose special fees (e.g., on imports), bottling fees, or transportation charges. 

C) Additional rule 

In addition to the taxation rule, general requirements apply [2], including: 

1. Licensing: 
   • Producers, distributors, and retailers must obtain licenses for manufacturing, importing, storing, or selling alcohol. Licensing fees vary by state. 
2. Labeling and Duty Stamps: 
   • All bottles must display excise duty-paid labels or holograms to prevent tax evasion.
   • Imported alcoholic beverages require customs-cleared stickers. 
3. Compliance with Local Excise Laws: 
   • Each state has its own excise policy, and compliance is mandatory for the movement and sale of alcohol within state boundaries. 

2. Specific Requirements on Tax Policy per Product

2.1 Beer

• Tax classification: 

In India, beer classification at the central level is primarily governed by excise laws. The Central Excise Department defines beer made from malt and the classification is based on alcohol content [3]: 

Table 2: Tax Classification in India 

• Excise Duty: 

Varies by state (see Section 3 below). Beer is taxed based on volume or alcohol content. States typically have separate rates for "mild beer" (up to 5% ABV) and "strong beer" (above 5% ABV). 

For example: Karnataka imposes higher duties on strong beer compared to mild beer. 

• VAT/Special Levies: 

Varies by state (see Section 3). In states like Maharashtra and Delhi, VAT is added to the excise duties, resulting in an effective tax rate of up to 60% on beer. 

2.2 Ready-to-drink beverages (mainly Chuhai)

• Tax Classification: 

RTDs are taxed based on their base alcohol type (e.g., spirit-based RTDs may face higher taxes compared to malt-based or wine-based RTDs). 

• Excise Duties: 

Varies by state (see Section 3 below). Spirit-based RTDs often face the same excise duty rates as distilled spirits, making them costlier than beer-based RTDs. 

• State Variations: 

Varies by state (see Section 3). Some states may offer lower excise duty rates for RTDs with lower alcohol by volume (ABV), typically between 3–9%. 

2.3 Whisky

• Tax Classification: 

The regulatory framework primarily follows the Central Excise Act and is supplemented by the FSSAI and Indian Customs regulations for both domestically produced and imported whiskies. The Central Excise Act, of 1944 [4] and its associated legislation, govern the excise duties on alcoholic beverages, including whisky, and sets the framework for classification. 

• Classification of Whisky in India: 

Table 3: Classification of Whisky in India 

• Excise Duties: 

Whisky, being a distilled spirit, attracts the highest excise rates compared to beer and RTDs. Rates vary significantly by state. 

Premium whiskies often face higher excise slabs, especially for imported products. 

• Customs Duties (for imported whisky): 

A Basic Customs Duty (BCD) of 150%. 

Additional duties such as the Social Welfare Surcharge (10%) and excise equivalent duties.

3. Local Indian States Requirements

3.1 Andhra Pradesh [1]

The tax structure in Andhra Pradesh for alcoholic beverages such as beer, whisky, and ready-to-drink (RTD) beverages is guided by the state excise policy [1.1,1.2] and includes several components such as excise duty, Value Added Tax (VAT), and customs duties for imports. 

The tax policy is structured as follows: 

1. Excise Duty and Value added Tax (VAT): VAT is applied to alcohol at the point of sale for both imported and locally produced beverages. This rate may vary based on the product classification and regional tax changes, but it is typically applied alongside excise duties. 

• Indian Made Foreign Alcoholic beverages (IMFL): The excise tax varies depending on the price range of the product. For example, IMFL priced up to ₹400 per case is taxed at 50%, while IMFL in the ₹2,500 to ₹3,500 range is taxed at 55%. Higher price ranges incur taxes of 50% to 45% [1.3]. 
• Beer: For domestically produced beer, if the price per case is below ₹200, the tax is 50%, while for beer priced above ₹200, the tax increases to 60% [1.4]. 
• RTDs: are taxed at a fixed rate of 35%, which means that regardless of the product's price or classification, the same tax rate (35%) applies. 

2. Additional Excise Duty (AED) [1.5]: 

• There is also an additional excise duty on these beverages. For imported alcoholic beverages and beer, excise duties are typically calculated based on the landed cost. 

3. Import Duties: 

• Imported alcoholic beverages like beer and whisky are subject to customs duties. The precise rate depends on the product's classification under the customs tariff, along with additional state excise levies. Imported alcoholic beverages like beer, whisky, and RTDs are subject to customs duties at federal rates. This is typically in the range of 50% to 100% of the product's value. 

4. Recent Changes: 

• A notable amendment, effective from 2024, introduced an Additional Retail Excise Tax (ARET), which adds 20.3% of the issue price to the cost of various alcoholic beverages, including beer, whisky, and RTD [1.3]. 

5. Tax calculation example per products 

Table 4: Example Tax calculation - Andhra Pradesh 

3.2 Delhi [5]

Delhi Excise Act, 2009 and the annual Delhi Excise Policy govern the taxation of alcoholic drinks imported into Delhi. The duties, fees, and other levies applicable to the importation of alcoholic beverages, including beer, RTDs, and whisky, are shown in the outline below: 

1. Import duty 

Import duty upon alcoholic beverages imported to Delhi from other countries: the amount depends on the type and quantum of alcohol and is determined yearly under the excise policy. [5.1] 

It is noteworthy that customs duties are applied to imported goods before they enter the domestic excise framework customs of the Customs Act 1962. As a result, customs duty is applied first when the imported goods enter Delhi territory. The goods are then handled by state excise departments for further taxation, based on local excise regulations [5.1]. 

2. Licensing and Registration Fees 

Registration for importing alcoholic beverages into Delhi requires an L-1 License (but only if you are an importer) or a wholesale license. You will be charged some registration fees by brand: 

• Beer: The fees are determined by the alcohol content and volume. 
• RTDs: Tends to attract lower registration fees primarily due to lower alcohol content. 
• Whisky: Due to its premium nature and high alcohol content, whisky attracts higher charges. 

3. Excise Duty 

Excise duty applied by every bottle is considered based on alcoholic content and type of drink: 

• Beer: Duty varies by strength (mild or strong). 
• RTDs: Lower excise duty compared to beer and whisky due to their lower alcohol percentage. 
• Whisky: Attracts higher excise duty, particularly on the more expensive brands. 

4. Value Added Tax (VAT) 

Delhi also imposes VAT on alcohol sales, which now stands at 25% over the sale value. This tax is incorporated into the Maximum Retail Price or MRP. 

5. Surcharge Fees 

• Label Registration Fees: For imports, every label must be registered, and the fee varies depending on the size and the type of product. 
• Infrastructure Development Fees will be covered on imported alcohol for the development of infrastructure but levied per case or bottle. 
• Excise Verification Fees: Eliminate verification fees for excise while importing. 

6. Procedures and Compliance 

A. Brand and Label Registration 

Before import, all brand products and labels need to be cleared and registered with the Delhi Excise Department. 

It includes submitting samples to check the quality and adhere to requirements set by the Food Safety and Standards Authority of India (FSSAI).

B. Import documents 

Necessary documents for importing alcohol include: 

• L-1 License: Billing and Bill of Lading. 
• Customs clearance certificates for imports from abroad. 
• Food Safety and Standards Authority of India (FSSAI) compliance certification. 

C. Taxes and Other Duties Payments 

Importers will have to pay all due duties and charges to receive a permit to transport into Delhi. Consequence of Non-Cooperation Importation of alcoholic beverages without proper licenses and label registration could lead to: confiscation of goods, fines and penalties as in the Delhi Excise Act, and Suspension or revocation of import licenses. 

7. Tax calculation example per products 

Table 5: Example for tax calculation per product - Delhi 

3.3 Haryana [7]

This policy on taxation relating to alcoholic beverages imported into Haryana is governed by the Haryana Excise Policy, which is annually revised by the state excise department. The framework follows traditional standards for excise applicable to imported alcoholic beverages: 

1. Basic Principles of Taxation on alcoholic beverages 

• Basic Customs Duty: This applies to imported alcoholic beverages upon their initial entry into India. The rates differ based on the alcohol content. 
• State Excise Duty: The state government of Haryana has levied charges against the import and sale of alcoholic beverages within the state.
• Port Charge: A state-level tax imposed on every bottle of alcohol imported into Haryana. 

2. Label Registration Fee 

Importers get registered in Haryana and pay the relevant charges to the label from the Haryana Excise Department. 

Assessment Fee: Imposed in relation to the amount of alcohol. 

VAT/Other local taxes: Haryana may impose additional duties on alcoholic beverages beyond VAT, in line with the current taxation system. 

3. Documentation and Compliance

To import alcohol into Haryana, importers require a Certificate of Registration from the Haryana Excise Department. Importers must comply with label registration for each brand and obtain a valid import permit for each consignment. All taxes, charges, and levies must be paid at checkpoints. 

Special Provisions: Alcohol imported for consumption in the state of Haryana shall adhere to the rule regarding labeling and packing provisions as mentioned in the Haryana Excise Policy. Alcohol brands must also meet FSSAI standards for safety and quality. Haryana follows a unique excise policy and tax structure, and the rates can vary for different types of alcoholic beverages. 

4. Tax Components in Haryana

1. Customs Duty (Central tax, levied on imports). 
2. Excise Duty (State tax, levied by Haryana on alcoholic beverages). 
3. Infrastructure Development Cess (IDC) (State tax on excise duties). 
4. VAT (State tax, applied on the sale price after excise duty). 

5. Tax calculation example per products 

Table 6: Tax calculation Example - Haryana 

3.4 Karnataka [8]

The tax policy for importing alcoholic beverages in Karnataka, such as beer, ready-to-drink (RTD) products, and whisky, is primarily governed by customs duties, state excise duties, and other applicable surcharges. 

1. Customs Duties (CD): 

• For alcoholic beverages imported into India, including Karnataka, Basic Customs Duty (BCD) applies. Typically, the Basic CD is 150% of the cost, insurance, and freight (CIF) value for whisky, beer, and similar products under Indian law. 
• Additionally, there may be Integrated GST (IGST) levied at the import stage, often 18% for these beverages, as part of the Goods and Services Tax. IGST is calculated on the sum of the CIF value, customs duties, and landing charges. 
• These duties are standard across India but must be paid before the goods enter Karnataka. 

2. Karnataka State Excise Duties [8.1]: 

Once imported, Karnataka imposes state excise duties to regulate alcohol consumption and maximize revenue. These rates vary based on the alcohol category: 

• Beer: The Additional Excise Duty (AED) ranges from 185% to 195% per bulk liter, depending on the alcohol content and volume of the beer. Imported strong beer may incur a total duty of ₹130 per bulk liter, making it more expensive than domestic varieties. 
• Ready-to-Drink (RTD): RTD beverages are categorized under similar excise classifications as lighter alcoholic drinks and taxed based on their alcohol content. They are subject to tax rates similar to those of beer. The additional excise duty (AED) varies depending on alcohol content and packaging size but is generally lower than the rates applied to whisky. 
• Whisky (Indian Made Foreign Alcoholic beverages - IMFL): Excise rates are higher compared to beer due to higher alcohol content. Premium and imported whisky are taxed heavily. AED rates are among the highest in India, with imported whisky falling into a high slab, often accounting for 20-30% [8.3]. 

Example Calculation for Imported Whisky (CIF Value: ₹2,000) 

1. Customs Duty (150%): ₹3,000 
2. Landing Costs (1% of CIF): ₹20 
3. IGST (18%): ₹900 
4. State Excise Duty (approx. 25%): ₹1,500 
5. Other Fees (labeling, permits): ₹500
6. Total Retail Price: ₹7,920 (excluding retail markup and logistics). 

3. Karnataka Infrastructure Development Cess: Applied at a flat 20% of excise duty for imported beverages [8]. 

4. Recent Policy Revisions [8.2, 8.3 and 8.4]: 

• In the 2024 Karnataka Budget, the government increased excise duties on alcoholic beverages and beer to boost state revenue. Beer prices are impacted the most, as this is the second hike within seven months. The duties remain significant as whisky forms a major revenue source for the state excise department. 
• Karnataka Excise (Excise Duties and Fees) (Amendment) Rules, 2024: This document outlines the excise structure, including fees for imports into Karnataka, differentiating between local production and imports. 

5. Tax calculation example per product 

Table 7: Example for Tax calculation - Karnataka 

3.5 Madhya Pradesh [9]

The tax policy for importing beer, whisky, and RTD (Ready-to-Drink) beverages in Madhya Pradesh is governed under the Madhya Pradesh Excise Act, 1915, and related state excise rules. 

1. Import Duty 

Import of beer, whisky, and RTD beverages into Madhya Pradesh is allowed under provisions of the Madhya Pradesh Foreign Alcoholic Beverages Rules, 1996. The import duty is levied based on the alcohol content and volume. 

• Beer: Import duties range between ₹20 to ₹30 per bulk liter for draught and bottled beer, depending on the product's classification [9.1]. Madhya Pradesh imposes bottling fees, excise duties, and transport fees on beer. Example: Transport of beer into casks or kegs requires the payment of a transport fee in the district where the licensed premises are located.
• RTD: Import duty may range from ₹5 to ₹10 per proof liter, depending on alcohol content. [9.2] RTDs fall under lower excise duty slabs compared to strong spirits like whisky. The import fees and duties for RTDs are applied per bulk liter and vary based on alcohol by volume (ABV). This allows the state to manage revenue effectively while promoting lighter alcoholic beverages [9.3]. 
• Whisky: Excise duties on whisky are determined by slabs under the Madhya Pradesh Excise Act, 1915. Imported whisky is subject to customs duties, additional excise levies, and bottle fees. Recent amendments in the state excise policy have focused on rationalizing duties to discourage excessive alcoholic beverage consumption while ensuring competitive pricing for premium products. 

2. License and Fees 

• Importers must obtain the relevant licenses (e.g., FL-10 for foreign alcoholic beverages warehousing or FL-11 for distribution). 
• Additional fees include: 
  • Bottle Fee: Applicable for every case of alcoholic beverages imported. 
  • Supervision Fee: Imposed to cover the cost of excise officials managing warehousing or bottling. [9.4] 

3. Tax Structure 

• Excise Duty: High excise duties apply to imported alcoholic beverages, often higher for whisky compared to beer or RTD beverages. 
• Export/Transport Fees: Payable at the district where the license is issued for storage or sale. 

4. Recent Policy Updates 

• Madhya Pradesh has periodically revised its excise policies to adjust tax rates. For example, a 20% reduction in import duty on beer and wine was announced to encourage consumption and reduce smuggling. 

Guidelines to Refer to: 

• Madhya Pradesh Excise Act, 1915 
• Madhya Pradesh Foreign Alcoholic Beverages Rules, 1996 
• Madhya Pradesh Beer and Wine Rules for import, bottling, and licensing procedures. 

These guidelines and updates help structure the importation, storage, and sale of alcohol while ensuring compliance with state excise regulations. 

4. Tax calculation example per products 

Table 8: Example for Tax Calculation - Madhya Pradesh 

3.6 Maharashtra [10] 

In Maharashtra, alcoholic beverages such as beer, whisky, and Ready-to-Drink (RTD) products are also subject to a range of taxes, including customs duties, excise duties, and VAT (Value Added Tax), governed by the Maharashtra State Excise Department and follows the Maharashtra Excise Policy. 

1. Excise Duty 

• Beer: 
  • Tax rates on beer are generally set per liter or per case, with a differentiation between domestic and imported products. 
  • The excise duty rate can vary depending on the beer's alcoholic content (e.g., light beer vs. stronger beer). 
• RTDs: 
  • RTDs are typically taxed similarly to spirits like whisky, with some variations based on alcohol content and volume. 
  • The excise duties for RTDs tend to be higher than for beer due to their higher alcohol concentration. 
• Whisky: 
  • Whisky is taxed at a higher rate compared to beer and RTDs, with excise duties applied per bottle or per liter. 
  • Different categories of whisky, such as Indian Made Foreign Alcoholic beverages (IMFL) and imported whisky, have separate duty structures. 

2. Import Duty 

The import duties on alcoholic beverages such as beer, RTD (Ready-to-Drink) beverages, and whisky in Maharashtra are determined by both Central and State excise laws and may vary depending on the product type and its origin. 

3. Central Custom Duty: 

Central Customs Duty is applicable to all alcoholic beverages that are imported into India. The duty rates can differ based on the product and alcohol content. 

• Beer: Typically, subject to Customs Duty at 50% to 100% of the value of the goods. 
• Whisky: Imported whisky is subject to a higher Customs Duty, ranging from 150% to 200% of the value of the goods. 
• RTDs: These beverages are also taxed at Customs Duty rates of 150% to 200%, similar to whisky. 

4. Maharashtra State Excise Duty: 

State Excise Duty is levied by the Maharashtra government on imported alcohol, in addition to the Customs Duty. 

• Imported Beer: 
  • The state excise duty is usually calculated per liter of alcohol, and it can vary depending on alcohol content and packaging. 
  • Rate: The excise duty on imported beer in Maharashtra can range between ₹40–₹80 per liter. 
• Imported RTDs: 
  • Excise Duty on RTDs is calculated based on their alcohol content and the retail price. The duty rate for RTDs is typically higher, reflecting their higher alcohol content. 
  • Rate: Excise duty on RTDs can range between ₹80–₹150 per bottle, depending on the alcohol volume.
• Imported Whisky: 
  • Imported whisky typically carries the highest excise duty. 
  • Rate: The excise duty on imported whisky is typically around ₹200–₹500 per bottle (750ml), but the rate can vary depending on the alcohol content. Excise duties for premium whisky can range from ₹500 to ₹2,000 per liter of pure alcohol (depending on alcohol content). [10] 

5. VAT (Value Added Tax): 

In addition to excise duties, imported alcohol is also subject to VAT at the state level: 

• Maharashtra imposes VAT at 25%-30% on alcoholic beverages. The rate can vary based on the specific product, with whisky generally attracting a higher VAT rate than beer or RTDs. 
• Beer: VAT: 25% of retail price 
• RTDs: VAT: 25% of retail price 
• Whisky: VAT: 30% of retail price 

6. Other Fees: 

• Import Fees: Maharashtra also imposes import fees on alcoholic beverages entering the state. These fees vary depending on the volume and type of alcohol. 
• Label Registration Fees: As per the Maharashtra Excise Policy, imported alcoholic beverages must be registered with the Excise Department before they can be sold. Fees are charged for label approval and packaging. 

7. Tax calculation example per products 

Table 9: Example for Tax calculation - Maharashtra 

3.7 Odisha [11] 

The tax policy structure in Odisha for alcoholic beverages like beer, whisky, and Ready-to-Drink (RTD) beverages is governed by the state's excise policy, which is periodically updated to meet revenue targets while also managing the availability and consumption of alcohol. The key elements of the tax structure include excise duties, import duties, and additional fees for various stages of the product's distribution. 

In Odisha, the excise policy for alcohol, including imported beer, whisky, and Ready-to-Drink (RTD) beverages, is set to make certain types of alcoholic beverages more affordable, especially in select cities like Bhubaneswar. The new excise policy offers reduced duties on imported alcoholic beverages, aiming to make high-quality brands more accessible [11.1]. 

Odisha's Tax Policy: 

1. Excise Duty: 

Imported Alcoholic beverages (including whisky and RTDs): 

• Excise Duty is charged at Rs 300 per LPL (liter of pure alcohol) plus 20% of the market value of the imported product. 
• This policy aims to reduce the overall cost of imported alcoholic beverages, making high-quality imported alcohol more affordable compared to previous years when higher duties were in place. 

2. Beer and IMFL: 

The excise duties on beer and IMFL (Indian Made Foreign Alcoholic beverages) remain relatively unchanged, but the introduction of a minimum retail price in select cities has affected the pricing structure. [11.2] 

3. Import and Retail Fees: 

• Importers must pay Import Fees and Transport Charges to cover the excise department's processing costs. [11.4] 
• Retailers are subject to license fees depending on their location and the volume of sales. These fees help regulate the distribution of alcoholic beverages in Odisha. [11.3] 

4. Other Charges: 

Additional Revenue for Odisha Excise Department (AROED) and Pass Fees are applied to the transportation of alcohol within the state and must be paid online before the consignment is allowed entry. 

5. Tax calculation example per products

The following example demonstrates how excise duty and import duties are applied to various types of alcoholic beverages in Odisha, with the total tax being a combination of both state excise duty and customs import duties. [11.1] 

Table 10: Example for Tax Calculation - Odisha 

3.8 Rajasthan [12] 

In Rajasthan, the excise policy for imported alcoholic beverages like beer, whisky, and Ready-to-Drink (RTD) beverages includes various charges, duties, and guidelines that affect importers and vendors. The tax structure is as follows: 

1. Excise Duty: 

• Beer: The excise duty on beer is generally 156% ad valorem (i.e., calculated as a percentage of the ex-brewery price). This can vary depending on the specific category of beer (e.g., premium beer vs regular beer). 
• Whisky (IMFL - Indian Made Foreign Alcoholic beverages): For IMFL, including whisky, the excise duty is applied differently based on the price range: 
  • For IMFL up to ₹770 per liter, excise duty may be ₹274 per liter. 
  • For higher price categories, excise duties increase. 
• RTD (Ready-to-Drink) Beverages: 
  • RTDs are often taxed under similar categories as IMFL with an ad valorem excise duty of 35%. 

2. Import Duty: 

• For imported beverages, the customs import duties are typically 50% to 100%, depending on the product type and classification. 
• Import duty is calculated on the CIF (Cost, Insurance, Freight) price of the product. 
• Importers are required to pay customs duties to the central government in addition to state-level excise duties. 

3. License Fees and Other Levies: 

Retailers selling foreign alcoholic beverages, beer, and other alcoholic beverages must obtain licenses from the state's excise department. 

4. VAT (Value Added Tax): 

In addition to excise and import duties, VAT is applied to the sale of alcoholic beverages. VAT is generally calculated based on the sale price of the beverage. 

Key Components of the Tax Structure: 

1. Excise Duty: 

• For Beer, the excise duty is 156% ad valorem [12.3] on the ex-brewery price, including the export fee but excluding Central Sales Tax (CST). [12.1] 
• Whisky: Indian Made Foreign Alcoholic beverages (IMFL), including whisky, are taxed based on price categories. For example, IMFL priced up to ₹770 per liter pays ₹274 per LPL (liter per liter), and the rate increases depending on the price per liter. [12.2] 
• RTD (Ready-to-Drink) beverages are typically taxed under similar IMFL categories, depending on the price level. [12.2] 

2. Import Process: 

• Imports of alcoholic beverages can occur under a permit system, where import duties are paid upfront, and permits are obtained from local excise authorities. This applies to both imported beer and whisky. 
• Importers must notify the Excise Inspector upon arrival of the consignment, and the consignment will be checked to ensure the correct duties have been paid. 

3. Additional Charges: 

• Apart from excise duty, there may also be additional license fees for operating retail outlets that sell these beverages.
• Licensing fees for selling foreign alcoholic beverages depend on the price range of the products. 

3. Tax calculation example per products 

Table 11: Example for Tax calculation - Rajasthan 

3.9 Uttar Pradesh [13]

Uttar Pradesh's excise policy regulates the import and sale of alcoholic beverages like beer, whisky, and ready-to-drink beverages (RTDs). According to the state's excise rules, various taxes and duties are imposed on these categories, and the fees vary based on type and alcohol content. 

• Beer: The excise duty on imported beer, is governed by the quantity and strength of the product. Beer prices in the state have been rising due to an increase in retail license fees, which include a 10% hike starting from April 2024. The state also enforces a restriction on the quantity of beer that individuals can carry across state borders, typically limited to 5 liters. 
• RTDs: These fall under similar excise rules as beer and spirits. The excise duty is determined based on the alcohol content, and any increases in retail and warehouse license fees impact on RTD pricing as well. There have been reports of increased regulatory costs, which are expected to affect the price of RTD beverages. [13.2] 
• Whisky: Foreign-made alcoholic beverages, including whisky, are subject to higher excise duties compared to domestically produced alcoholic beverages. For example, retail license fees for whisky and foreign alcoholic beverages have also been increased by 10% under the new excise policy. This increase directly impacts the prices of imported whisky. 

In Uttar Pradesh, the import duties and tax policies related to alcoholic beverages like beer, ready-to-drink (RTD) cocktails, and whisky follow the state's excise policies, which include both excise duties and customs tariffs. 

1. Excise Duty [13.3]: 

• Imported Beers: The excise duty can vary based on the alcohol content. For example, beer with 5% alcohol by volume (ABV) is charged around ₹28.46 per liter, while beer with 8% ABV is taxed at ₹49.23 per liter. 
• Whisky: especially foreign-made ones, follows a tiered excise duty system based on the production cost of the bottle. The duties for whisky and other spirits can vary significantly, with rates set for bottles that cost between ₹157 and ₹297 per bottle depending on production cost. 
• Ready-to-Drink (RTD) Beverages: These products are taxed similarly to beer and spirits, depending on alcohol content and other factors like packaging. 

In addition to excise duties, the Uttar Pradesh government has set up a progressive excise policy for 2024-25, aiming to balance revenue generation and responsible consumption. This policy includes adjustments in license fees for retail outlets, potentially influencing the final price consumers pay. 

Excise Policy Changes: Starting in 2024, Uttar Pradesh has introduced a 10% increase in retail license fees, which will affect the final prices for consumers. 

2. Customs Duty

Imported alcoholic beverages (such as foreign beer, RTD, and whisky) are subject to customs duties at the federal level. These duties are additional to the state-level excise taxes and are calculated based on the value of the imported goods. The specific percentage for each product can vary based on its classification and country of origin. Customs duties typically range between 50% and 100% of the product's value.  

3. Tax calculation example per product

An example calculation based on the prevailing tax structure for imported beer, whisky, and RTD in Uttar Pradesh (UP), with a focus on excise duty, customs duty, and VAT is presented below. 

Table 12: Example for Tax Calculation - Uttar Pradesh

The excise calculation above assumes a 1-liter bottle of beer and whisky, and volume for RTDs. If the packaging or volume differs, adjust the excise duty accordingly. 

3.10 West Bengal [14]

In West Bengal [14.1], the taxation and excise duty structure for imported alcoholic beverages, including beer, whisky, and Ready-to-Drink (RTD) beverages, follows a complex set of rules, primarily based on the ex-distillery price (EDP) of the product [14.1]. 

Key Points of the Tax Structure: 

1. Excise Duty 

• The excise duty is higher for premium products like imported whisky compared to RTDs and beer. 
• West Bengal follows a slab-based excise duty system for alcoholic beverages. For beer, the excise duty can range from Rs 40 to Rs 50 per bulk liter depending on the type (mild or strong beer). 
• RTD and whisky are subject to additional excise duties based on their category and price range. 
• For imported alcoholic beverages, the excise is now levied on the EDP, with higher duties for premium categories like bottled-in-origin (BIO) alcoholic beverages. 

2. Additional Excise Duty (AED): 

• This varies from Rs 66 to Rs 640 per bulk liter, depending on the price slab. Imported alcoholic beverages and premium products face higher excise duties. 

3. Sales Tax: 

• A sales tax of 30% has been imposed on the Maximum Retail Price (MRP) for alcoholic beverage products, including beer and whisky. 
• This was introduced as part of efforts to shore up revenue, affecting both local and imported alcoholic beverages. [14.3] 

4. Imported Alcohol: 

Imported alcoholic beverages, such as Scotch whisky, are subject to additional duties based on the EDP, along with GST on top of the excise and sales taxes. The excise duty structure for imported alcoholic beverages has been streamlined to reduce the price differential with neighboring states. The price list of foreign liquor can be checked at the Excise Department portal. [14.4] 

5. Tax calculation example per product 

Table 13: Example of Tax Calculation - West Bengal 

4. References

1. Andhra Pradesh 

1.1. https://excise.ap.gov.in/

1.2 https://cag.gov.in/uploads/download_audit_report/2021/Chapter-3-State-Excise-Duties-060a7b7d269c024.59900548.pdf 

1.3 https://www.legalitysimplified.com/amendment-to-retail-excise-tax-in-andhra-pradesh/

1.4 https://www.newindianexpress.com/states/andhra-pradesh/2021/Nov/11/andhra-pradesh-government-amends-alcoholic beverages-tax-2382176.html

1.5 https://www.deccanchronicle.com/nation/current-affairs/191221/andhra-pradesh-rationalises-vat-additional-excise-duty-on-alcoholic beverages.html

2. Central Board of Indirect Taxes and Customs (CBIC)

https://www.cbic.gov.in/entities/customs 

3. Central Board of Indirect Taxes and Customs (CBIC)

taxinformation.cbic.gov.in

4. Central Excise Act, 1944 

https://taxinformation.cbic.gov.in/content-page/explore-act 

5. Delhi Excise Act, 2009 

5.1 https://excise.delhi.gov.in/excise/frequently-asked-questions 

5.2 https://excise.delhi.gov.in/excise/excise-department

6. Food Safety and Standards Authority of India

https://www.fssai.gov.in/upload/uploadfiles/files/Compendium_Alcoholic_Beverages_Regulations_04_03_2021.pdf

7. Haryana Excise Department Website 

7.1 http://haryanatax.gov.in/

https://haryanatax.gov.in/HEX/appmanager/HexPortal/HaryanaExcise?_nfpb=true&_pageLabel=HaryanaExcise_portal_book_83_book_84#wlp_HaryanaExcise_portal_book_83_book_84

https://haryanatax.gov.in/HEX/DownloadPDF?formName=/ExcisePolicy2023_24/Excise_Policy_2023_24_001.pdf%27

8. Karnataka 

8.1 Karnataka Excise (Excise Duties and Fees) (Amendment) Rules, 2024

https://legalitysimplified.com/wp-content/uploads/2024/02/Karnataka-Excise-Excise-Duties-and-Fees-Amendment-Rules-2024.pdf 

8.2 https://www.thenewsminute.com/karnataka/karnataka-govt-reduces-premium-liquor-taxes-beer-prices-likely-to-rise 

8.3 https://www.hindustantimes.com/india-news/karnataka-government-proposes-hike-in-liquor-prices-in-2023-24-budget-plans-to-revise-real-estate-guidance-values-101688758145875.html

8.4 https://www.businesstoday.in/india/story/karnataka-budget-liquor-to-get-costlier-in-state-beer-prices-to-be-impacted-the-most-417778-2024-02-16

9. Madhya Pradesh 

9.1 http://www.excise.mp.gov.in/ 

9.2 https://www.latestlaws.com/bare-acts/state-acts-rules/madhya-pradesh-state-laws/m-p-excise-act-1915/m-p-beer-and-wine-rules/

9.3 https://www.business-standard.com/article/current-affairs/mp-cabinet-approves-new-excise-policy-discourages-alcoholic beverages-consumption-123022000110_1.html

9.4 https://invest.mp.gov.in/wp-content/uploads/2021/06/Excise_Department.pdf 

10. Maharashtra 

10.1 https://exciseservices.mahaonline.gov.in

10.2 https://excise.mah.nic.in/ 

11. Odisha 

11.1. https://odishabytes.com/new-excise-policy-makes-imported-alcoholic beverages-cheaper-in-selected-cities-of-odisha/

11.2. https://excise.odisha.gov.in/sites/default/files/2020-03/Excise_Policy.pdf 

11.3. https://odishabytes.com/new-excise-policy-makes-imported-liquor-cheaper-in-selected-cities-of-odisha/

11.4. https://investodisha.gov.in/goswift/ServiceDetails.aspx?enc=7FSsH90HILTksN71/eQQSmy1YMQlV2t0iE3/Snc40JnZdFD/6gNLlMzV+fUnj0Ee6kqajnhUz4lcxB0oqSNlWM/DWD7bWjUw5ogOwN9CufvFnJFpkizBSB2/xX/neFAtiHpfMQRuJozX8oMkXOfn2w==

12. Rajasthan 

12.1 https://excise.rajasthan.gov.in/RSED/Website/IMFL.aspx#:~:text=The%20Excise%20Department%20issues%20various,Distilleries/Breweries/Bottling%20Plants

12.2 https://finance.rajasthan.gov.in/PDFDOCS/EXCISE/10623.pdf 

12.3 https://excise.rajasthan.gov.in/Downloads/RSED/Information%20Act%20_First%20file.pdf

13. Uttar Pradesh 

13.1. https://cms.upexciseonline.co 

13.2. https://spiritz.in/2023/12/20/up-approves-new-excise-policy-for-next-fiscal/

13.3 https://uatcms.upexciseonline.co/license-module/

13.4 https://www.kaanoon.com/157781/uttar-pradesh-excise-law-and-rules

14. West Bengal

http://excise.wb.gov.in/

14.1. https://excise.wb.gov.in/portal_New_default.aspx 

14.2. https://www.tritech.solutions/post/new-excise-policy-for-west-bengal 

14.3. https://www.brewer-world.com/west-bengal-imposes-30-per-cent-sales-tax-on-alcoholic beverages/

14.4. https://excise.wb.gov.in/CommonUser/Check_MRP_Registered_Brand_Liquor.aspx?type=28