Mumbai, June 11, 2025 – In a major overhaul aimed at modernizing its excise administration and boosting revenue collection, the Maharashtra cabinet, under the leadership of Chief Minister Devendra Fadnavis, has approved a wide-ranging reform package for the Excise Department. The move comes amid growing fiscal pressures and the need to increase state revenue while curbing illegal practices in the liquor trade.
The reforms, grounded in the recommendations of a high-level government committee, combine technological innovation, structural changes, and revised tax policies to create a more transparent, efficient, and enforcement-driven excise framework.
AI-Powered Control Room to Monitor Liquor Operations
A landmark initiative in the reform package is the establishment of an AI-powered Integrated Control Room that will monitor the activities of distilleries, liquor manufacturers, and wholesalers across Maharashtra in real-time. This high-tech surveillance and data analysis unit is expected to:
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Detect anomalies in production and distribution patterns
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Track liquor movement across the supply chain
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Prevent smuggling and illicit liquor production
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Improve regulatory compliance and minimize revenue leakage
This AI-based monitoring marks a significant step in digitizing the excise ecosystem and follows best practices adopted in states like Uttar Pradesh and Karnataka.
Infrastructure Expansion: New Divisional and Superintendent Offices
To strengthen the department’s physical presence and improve enforcement capabilities, the cabinet approved the opening of new divisional and superintendent offices:
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A new divisional excise office in Mumbai city and suburbs
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Additional superintendent offices in Mumbai suburbs, Thane, Pune, Nashik, Nagpur, and Ahilyanagar
These offices will act as regional enforcement hubs and are expected to streamline licensing, inspections, and tax collection, while reducing the prevalence of illicit alcohol markets and ensuring better field-level vigilance.
Revised Excise Duty: Significant Tax Hikes Across Liquor Segments
In a bid to increase state revenue, the cabinet sanctioned steep hikes in excise duties across multiple categories of liquor:
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For Indian Made Foreign Liquor (IMFL) with a declared production value up to ₹260 per bulk litre, the excise duty will rise from 3x to 4.5x the production value
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For Country Liquor, the duty will increase from ₹180 to ₹205 per proof litre
These revised rates are projected to impact retail pricing, with minimum selling prices now set as follows:
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₹80 for Country Liquor
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₹148 for Maharashtra Made Liquor (MML)
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₹205 for Indian Made Foreign Liquor (IMFL)
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₹360 for Premium Foreign Liquor brands
These reforms aim to strike a balance between increased revenue generation and responsible alcohol consumption.
Maharashtra Made Liquor (MML): A Boost for Local Producers
One of the most significant policy introductions is the creation of a new category of liquor called Maharashtra Made Liquor (MML). Key features include:
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Made from grain-based alcohol
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Production restricted to Maharashtra-based manufacturers
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Designed to foster local entrepreneurship and reduce dependency on imported liquor brands
Manufacturers must register new brands under the MML category, which is expected to diversify the state’s liquor offerings and provide a competitive edge to local producers.
Liberalized Licensing: Conducting Agreements for FL-2 and FL-3
To modernize operations in the hospitality and retail sectors, the cabinet has allowed:
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FL-2 licenses (sealed foreign liquor sales) and
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FL-3 licenses (restaurant and hotel liquor sales)
to be transferred or operated under conducting agreements, subject to the payment of additional charges:
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15% of the annual license fee for FL-2
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10% of the annual license fee for FL-3
This provision is expected to ease business operations and formalize existing informal arrangements, while also generating additional non-tax revenue for the government.
Cabinet’s Comprehensive Strategy for Excise Reform
The approved reforms were based on a report submitted by a high-level committee appointed to explore innovative strategies to boost revenue and regulate the liquor industry. Drawing from the successful excise frameworks of other Indian states, the committee emphasized the need for technological integration, policy rationalization, and institutional strengthening.
The reforms are aligned with the government’s broader goals of:
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Tackling the state’s fiscal deficit
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Increasing accountability in liquor trade
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Creating an investor- and business-friendly environment
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Ensuring consumer safety through quality and regulatory checks
Conclusion: A Transformative Step Towards Fiscal Strength and Efficient Governance
The Maharashtra government’s approval of a sweeping excise reform package demonstrates its commitment to fiscal prudence, good governance, and technological adoption. By combining AI-based monitoring, duty restructuring, and licensing liberalization, the state is poised to not only enhance revenue but also improve public accountability and consumer protection in the liquor industry.
As the reforms unfold, Maharashtra sets a precedent for other Indian states aiming to modernize their excise systems, eliminate corruption, and bolster state finances through responsible and innovative alcohol regulation.
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