Residents of the national capital who enjoy rum, whisky, tequila, and brandy are likely to face a major financial pinch soon. Partaking in alcoholic beverages is set to become more expensive in the coming days as the Delhi government gears up to introduce a brand-new excise policy or implement major modifications to the existing framework right before the upcoming festive season. These potential changes are expected to drive up liquor bottle prices across the city, delivering a significant blow to consumers.
Final Draft of the New Policy Prepared
According to reports, the Delhi government has finalized the draft of its new excise policy and plans to issue an official notification regarding it in October. However, the administration is currently awaiting the arrival of a new commissioner in the Delhi Excise Department, following which the draft will be forwarded to the Delhi Cabinet and Lieutenant Governor Taranjit Singh Sandhu for formal approval.
If this new policy comes into effect ahead of the peak festive season, both the excise duty and retail margins on liquor are likely to be increased. The primary objective behind this policy overhaul, as stated by officials, is to enhance government revenue. A senior official noted that as soon as the Lieutenant Governor and the Delhi Cabinet grant their clearance, the government intends to notify the policy in October to ensure implementation before the festive rush begins.
Expansion of Premium Outlets and Margin Adjustments
The upcoming policy is not expected to pave the way for private players to re-enter the market; instead, the core focus remains on increasing the fixed retail margin and raising excise duties. Currently, only government-run liquor stores operate across Delhi. Due to fixed margin constraints, retail vendors do not generate substantial earnings, but the new revisions are anticipated to improve store standards and attract a larger customer base.
Furthermore, one of the most substantial changes could involve the expansion of premium liquor stores. At present, a fixed retail margin of 50 rupees per bottle is applied to Indian Made Foreign Liquor, while 100 rupees is levied on foreign liquor. Because of these caps, most retail shops in Delhi refrain from stocking premium imported liquor priced above 1,000 rupees.
Relief from Resorting to Neighboring Cities
This limitation forces premium liquor buyers to travel to neighboring cities like Gurugram and Faridabad, where the absence of fixed margins results in lower prices and greater availability of high-end brands. For instance, a bottle of Black Label typically retails for around 3,500 rupees in Delhi, whereas the exact same brand can be purchased for approximately 2,400 rupees in Gurugram. Removing or adjusting these fixed margins is expected to resolve this recurring issue.
Potential Hikes in Excise Duty and Timings
Apart from the retail margin adjustments, the Delhi government also plans to increase excise duties. Currently, excise duty in Delhi is calculated based on various wholesale price slabs and varies depending on the category of alcohol. The duty on Indian spirits ranges from 30 percent up to 300 percent. Any upward revision in these tax slabs will cause retail prices to surge sharply. Additionally, operating timings for serving liquor in hotels, clubs, and restaurants could also undergo modifications.
It may be recalled that the liquor policy introduced by the previous Aam Aadmi Party government was scrapped following investigations by the Central Bureau of Investigation and the Enforcement Directorate. Subsequently, the Delhi government reinstated the old policy regime and permitted only government-operated outlets to function. Industry experts point out that Delhi's excise duty is not the highest in the country, leaving some room for adjustment if the administration seeks to maximize revenue. Beer currently attracts an excise duty of 150 percent and imported liquor carries an 85 percent duty, along with a 25 percent value-added tax. Any escalation in these duties will undoubtedly push prices higher, dampening spirits for drinkers during the festive season.
