Ladakh gets a new excise policy to curb drug dependence by offering wider liquor choices. The liberalized policy increases vends from 2 to 20, permits hard liquor sales, and simplifies licensing to boost tourism and excise revenue.
Lieutenant Governor Vinai Kumar Saxena has accorded approval to the New Excise Policy of Ladakh, which primarily aims at curbing the growing dependence on narcotics and drugs and giving people a wider choice of low alcoholic content liquor in the Ladakh region.
According to an official statement, the Excise policy seeks to optimise excise revenue in a transparent, accountable and regulated manner. The new Excise Policy also marks a significant reform in the excise regime of the Union Territory and introduces a liberalised, transparent and technology-enabled regulatory framework, aimed at balancing public convenience, tourism promotion, revenue optimisation and effective and efficient regulation of liquor trade.
Rationale Behind the New Policy
The new policy comes after extensive meetings with civil society organisations, NGOs, religious organisations, public representatives and government officials in recent months. One of the major concerns raised in these meetings was the increasing dependence on narcotic substances and psychotropic drugs, particularly due to the unavailability of hard liquor in Ladakh, prompting individuals to resort to illegal narcotic substances and smuggled and spurious liquor.
Representatives of Ladakh Gompa Association, as indeed medical experts in Ladakh, had also suggested expanding the liquor range at authorised vends, to overcome the growing menace of drug abuse. Taking note of the suggestions, LG Saxena had assured to review the existing excise policy. Subsequently, a committee of officers was constituted to draft a revised Excise Policy for the Union Territory.
The committee examined in detail, the aspects concerning public convenience, prevention of illicit liquor trade, its societal impact, augmentation of excise revenue, transparency in allotment of vends, streamlining of licensing procedures, digitisation of departmental processes and strengthening of enforcement mechanisms.
Key Reforms and Liberalisation
A key feature of the new excise policy is the liberalisation of the existing restrictive regime, which had resulted in limited availability of brands and outlets, and thus created an “artificial scarcity” that often deterred tourists visiting Ladakh. This often prompted tourists to carry liquor with them from outside the Ladakh region, also causing revenue loss to the UT. The policy seeks to address this “artificial scarcity” by expanding lawful supply channels, while maintaining strict regulatory oversight.
Expanded Availability and Licensing
Key reforms approved under the new policy include the sale of hard liquor, including Foreign Liquor and Indian Made Foreign Liquor (IMFL), which is now permitted through retail vends. Earlier, only beer, wine and Ready-to-Drink (RTD) beverages were permitted for retail sale through vends, excise duty rates have been rationalised for liquor, beer and wine.
For the first time, retail vend of liquor has been permitted in guest houses and homestays, on payment of requisite licence fees. Earlier, only hotels were permitted to serve liquor. Beer bars with microbreweries will also be permitted in Ladakh.
To improve accessibility and ensure regulated availability, 20 liquor vends to be opened through e-auction. Earlier, only 2 liquor vends were operational in Ladakh. Liquor will now be available in new districts Nubra, Changthang, Sham and Zanskar, providing greater accessibility to tourists. Earlier, liquor was only available in Leh city.
Simplified Consumption Rules and Permissions
As per the release, consumption of liquor is now allowed within the hotel premises including in the rooms. Earlier, liquor consumption was restricted to bar only. Number of documents required for obtaining excise licence, reduced to just 6. Earlier, 16 documents were required. Requirement of the “Opinion” of District Administration for grant of licence is now removed. Earlier, the “Opinion” of the District Administration was mandatory and used to take several months.
Permission granted to serve liquor on special occasions at private places, after paying requisite fee. Earlier, it was not allowed. Permission granted to serve liquor in banquet halls or party halls, etc., on specific occasions, after paying the requisite fee. Earlier, it was not permitted.
Streamlined Distribution and Duty Structure
Manufacturers shall now be permitted to undertake wholesale distribution of liquor, thereby, encouraging the availability of quality brands and improving supply chains. Earlier, this provision was not in place, said the release. A simplified duty structure has been introduced with a single duty framework at wholesale and retail levels. Earlier, multiple duty structure at the wholesale and retail levels. A uniform excise duty of Rs 500 per LPL has been prescribed across all IMFL brands, to prevent revenue leakage and simplify administration.
Revenue Optimisation Measures
In order to optimise the excise revenue, the annual fee for a wholesale license has been increased from the existing Rs 3.5 lakh to Rs 5 lakh. Base price for retail vends too, has been revised. The base price in Leh Municipal wards has been fixed at Rs 60 lakhs, while in other areas, it has been fixed at Rs 30 lakhs. The Profit margin of retailers too, has been reduced from existing 12% to 10%.
The new excise policy has effected a major reform by deregulating the existing regime. The requirement of 16 documents for obtaining an excise licence has been reduced to only 6 documents, i.e. PAN, Aadhar, Incorporation certificate, blueprint of premises, GST/FSSAI/Tourism Registration, whichever available, and compliance with Rule 18 of the Excise Rules. Further, in the existing regime, Tourism Registration was mandatory for hotels to get a liquor license. But now, only GST registration will be sufficient for getting excise license. But hotels that are not registered in GST would be required to furnish FSSAI or tourism registration.
Policy Goals and Enforcement
LG VK Saxena highlighted that the revised Excise Policy seeks to establish a balanced and pragmatic framework that addresses public concerns, strengthens regulatory oversight, facilitates tourism and economic activity, prevents illegal trade and contributes towards reducing the dependence on narcotic substances, through lawful and regulated channels. Saxena reiterated the Administration’s commitment to ensuring transparency, accountability and public welfare while implementing the policy and strengthening excise administration across the Union Territory.
The Excise Policy also incorporates robust enforcement and consumer protection measures. Stringent penalties, including cancellation of the licence and forfeiture of EMD, have been prescribed against retailers selling liquor above the Maximum Retail Price (MRP). According to the release, to prevent excise duty evasion and strengthen traceability, manufacturers and importers shall be required to affix security holograms approved by the Excise Department on liquor products.
Considering the environmental concerns, the new policy also prohibits the sale of liquor in plastic bottles and provides that liquor shall be sold only in approved glass bottles, PET bottles and tin cans. The new policy prescribes that the licensees may employ any person above 21 years of age to assist them in the liquor business, thereby increasing employment opportunities for all. The policy further provides that retail vends shall be established only after ensuring compliance with prescribed norms relating to a 100-meter distance from religious places, educational institutions, hospitals and public parks, in accordance with Government of India guidelines. (ANI)
(Except for the headline, this story has not been edited by Asianet Newsable English staff and is published from a syndicated feed.)