UP Distilleries Push for Key Reforms in Upcoming Excise Policy 2025-26

Uttar Pradesh distilleries have raised several concerns regarding the proposed Excise Policy for 2025-26, calling for significant reforms to create a more competitive environment and increase the state’s revenue. Their demands aim to address bottlenecks in operations, reduce costs, and attract investments.

Key Reforms Proposed by UP Distilleries

1. Abolition of Franchise Fee
   Distilleries are seeking the removal of the recently introduced franchise fee, which they believe discourages the entry of big players into Uttar Pradesh’s liquor market.
2. Reduction in Export Duty on ENA
   Export duty on Extra Neutral Alcohol (ENA) is currently Rs 3 per bulk litre. Distilleries propose reducing it to Rs 0.50 per bulk litre to enhance exports and establish Uttar Pradesh as a leading exporter.
3. Lower Bottling Costs for Exported IMFL
   The cost of bottling Indian-Made Foreign Liquor (IMFL) for export should be capped at Rs 50 per case. This move would encourage converting ENA into packaged IMFL cases, increasing revenue and promoting Uttar Pradesh as a liquor-exporting state.
4. Direct Purchase of HBS/CAB
   FL-3/3A license holders should be allowed to directly purchase High-Bulk Spirits (HBS) and Compound Alcohol Beverages (CAB). Currently, these purchases are routed through PD-2 licenses, which reduces production capacity and adds inefficiencies.
5. Simplification for BIO Imports
   Importers of Bottled-in-Origin (BIO) foreign liquor are seeking permission to transfer their goods directly into excise bonds (master bonds). This step would streamline operations and improve distribution efficiency.

Call for Independent Bottling Licenses in Uttar Pradesh

In Punjab, Rajasthan, and Uttarakhand, bottling of liquor under FL-3/3A licenses is allowed independently, separate from PD-2 licenses. Distilleries in Uttar Pradesh are urging for similar reforms to ensure fair and competitive opportunities for all entrepreneurs. Alternatively, they suggest that existing distilleries in the state be granted FL-3/3A licenses to set up bottling units anywhere in Uttar Pradesh.

Transparency Through Lottery System

The distilleries also propose introducing a lottery system for issuing licenses, ensuring transparency and equal opportunities in the upcoming Excise Policy.

Transforming Uttar Pradesh Into a Liquor Export Hub

By addressing these demands, the proposed Excise Policy 2025-26 could boost revenue, attract investments, and establish Uttar Pradesh as a key exporter in the liquor industry.