New Excise Policy: Labels with high-end security features among steps to check duty evasion and sale of spurious liquor

Special excise adhesive labels, inspection teams and a state-of-the-art lab are some of the steps planned by the Delhi government to regulate the conduct of retail liquor vends and check tax evasion and sale of spurious alcohol. It has also recommended price and outstation sale oriented criteria for registration of different brands of liquor in the national capital to promote startups in the industry.

The new Excise Policy 2021-22, which was approved in June, was uploaded on the Excise department’s website on Monday.

According to the policy, the Excise Department has introduced Excise Adhesive Labels (EALs) with high-end security features manufactured by Security Printing and Minting Corporation of India Limited (SPMCIL) to avoid tax evasion and plug leakages in the supply chain.

These EALs have necessary clauses regarding advanced technology and high-security features like anti-counterfeiting special tag printing ink, mark with 3-D features and online verification of labels with Checko App used in the printing of EAL, developed by IIT Kanpur. The EALs manufactured by SPMCIL shall be implemented in a timely manner.

“The new labels have high-end security features which cannot be cloned and duplicated, thereby extenuating the chances of duty evasion. Further, till the implementation of the new barcodes, the present system of bar-coding and ordering through Excise Supply Chain Information Management System (ESCIMS) will continue,” it says.

The policy also states that Special Inspection Teams will be set up to constantly check and examine the conduct and operation of retail vends and warehouses to ensure that none of the licensing terms are being violated.

“This will be done to maintain the quality standard that is expected of any shop being set up in Delhi,” according to the policy document.

An officer will be appointed as Deputy Commissioner (Wholesale Operations), it said.

The policy also states that teams will be set up to systematically pick up samples from bonded warehouses, retail vends, hotels, clubs and restaurants across all brands and the report of the same will be published on the website.

“Any L-1 license holder or retail shop owner found in possession spurious liquor will lose their entire licence and will be subject to criminal proceedings as per applicable laws.

“They will be permanently blacklisted and barred from operating in Delhi, and in good faith, the information of the same will be provided to the Excise Department of all other states (sic),” the document said.

While stating that the supply of spurious liquor is a serious public health hazard, the policy states that the Delhi government will set up a state-of-the-art lab that will specialise in detecting spurious and counterfeit liquor.

Liquor brand’s pricing

The new criteria will now depend on a liquor brand’s pricing and its sales figures outside the national capital.

An official of the excise department said the move is likely to promote new brands and startups in the industry.

According to the excise policy, whiskey brands have been divided into five categories depending on their price. For a whiskey brand priced at Rs 401 or above per quarter, no sales figures (outside Delhi) are required.

However, the policy said that an international whisky brand being bottled in India and with retail price up to Rs 600 per quarts, shall be registered only if it has sold over 5 lakh cases worldwide, in any of the two preceding financial year that is, 2019-20 or 2020-21.

Brands selling whiskey at a lower price also need to meet the sale-eligibility criterion.

“Economy brand with retail price up to Rs 140 per quarts, shall be allowed registration in Delhi only if the brand has sold a minimum of 80,000 cases in any of the two preceding financial years, that is, 2019-20 or 2020-21, excluding Delhi.

“Brands with retail price between Rs 141 and Rs 2,501 per quarts, shall be allowed registration in the National Capital Territory of Delhi only if these brands have sold a minimum of 1,20,000 cases all over India, including Delhi, in any of the two preceding financial years,” the policy document stated.

It also said that brands with retail price between Rs 251 and Rs 400 per quarts shall be allowed registration only if the brands have sold a minimum of 60,000 cases all over India.

For brandy, vodka, gin and mixed alcoholic beverages brands with less than 8 per cent alcoholic strength, no sale limit is prescribed, the policy said.

“For Rum brands with the retail price above Rs 250 per quarts, no sale limit has been prescribed. A Rum brand with retail price up to Rs 120 per quarts shall be registered only if it has sold 50,000 cases all over India, including the NCT of Delhi, in any of the two preceding financial years i.e. 2019-20 or 2022.

“A Rum brand with the retail price between Rs 121 and Rs 250 per quarts shall be registered only if it has sold 60,000 cases all over India, including Delhi, in any of the two preceding financial years,” the policy said.

In case of beer, the sales figures criteria is not required if it is priced above Rs 100 per quarts bottle (650 ml) in Delhi.

For lower priced beer brands, the registration criteria includes a sales figure of 1.5 lakh all over India if it has alcohol strength up to 5 per cent. If it is strong beer with alcohol strength above 5 per cent and priced up to Rs 100 per quarts bottle (650ml), the sale figure criteria is 3.5 lakh across the country for registration in Delhi.

“For Diet Beer brands, no sale limit has been prescribed. Diet Beer should have alcoholic strength below 5 per cent and caloric value less than 31 g per 100 ml,” the policy document added.

Microbreweries

Delhiites will now be able to fill their bottles or ‘growlers’ with freshly brewed beer from any microbrewery in the city as the Delhi Excise policy for 2021-22 promises to promote such establishments.

“Draught beer shall be allowed to be taken away in bottles or ‘growlers’. Microbrewery shall also be allowed to supply to other bars and restaurants that have licence to serve liquor,” the policy document stated.

Senior officials of the excise department said the move will allow people to go to such microbreweries and take away freshly brewed beer.

He added that the new policy will, however, command a number of quality checks to ensure the safety of the product being served.

The policy document also stated that draught beer shall also be allowed to be served at permitted events, banquet halls that have temporary licences such as P-10, P-10E etc.

“Wherever draught beer is being served as a takeaway, clear signage and information will be needed to put up about its short shelf life and the bottles will have to mention the expiry date clearly,” the excise policy said.

The policy clearly states that establishments found selling draught beer “after its expiry date will immediately have his license revoked”.

The excise policy also recommended serving of liquor in open spaces such as terrace, balcony at licenced hotels and restaurants.

“Licensees of HCR (hotel, clubs and restaurants) shall be allowed to serve any Indian Liquor and Foreign Liquor in any area within the licensed premises, including open spaces viz. terrace/balcony/lower area of licensed premises with the condition that the liquor serving area shall be screened off from the public view,” the policy said.

“The bars in Hotels, Restaurants and Clubs are allowed to operate till 3 am except those licensees which have been given license to operate round the clock service of liquor,” it added.

The government will work with the industry to set the safety standards and practices for it, the policy says.