Delhi govt extends existing excise policy by 6 more months

The Delhi government has decided to extend its existing excise policy by six months due to the time needed for coming up with a new liquor trade regime, officials said on Thursday.

The policy has been extended till March 31, 2024 following the requisite approvals from the Delhi government and the lieutenant governor, a senior officer said.

A proposal of the excise department to extend the policy, implemented on September 1 last year, was sent for the LG's nod after it was cleared by the government. The file was sent back to the government from the LG's office, marked as 'seen', the officer added.

A notification for the extension of the policy will be issued by the excise department on Friday. After the notification, the existing excise licences will be renewed for six months on payment of fees on a pro-rata basis, he said.

The current excise policy was going to lapse on September 30, requiring either its extension or replacement with a new policy for regulatory necessities to operate retail and wholesale liquor trade in the national capital.

Now that the policy has been extended, the entry of private players into retail liquor trade will remain blocked at least till the start of the next financial year (2024-25). By then, a new excise regime will possibly be announced, the officials said.

A draft of a new policy for 2023-24 was prepared by the excise department, but it is yet to be vetted by the government, they added.

The current policy was meant to be a stop-gap measure to prevent a regulatory vacuum due to the sudden scrapping of the new excise policy for 2021-22 by the Aam Aadmi Party (AAP) government after LG V K Saxena recommended a CBI enquiry into alleged irregularities in its implementation.

The new policy (2021-22), aimed at reforming the liquor trade in Delhi, was implemented on November 17, 2021 and it came to an end on August 31, 2022. Under the policy, the Delhi government quit retail liquor sale, allowing private parties to run liquor stores across the city under a liberal excise regime.

Experts in the liquor trade said Delhi needs regulatory stability for a smooth liquor business and better consumer experience.

The current excise policy was earlier extended by six months by the government after March 31.

'The existing policy is being extended repeatedly just to keep the business going. It is not a planned excise policy design to work for all stakeholders. What the industry needs more than anything else is regulatory stability,' said Vinod Giri, director general of the Confederation of Indian Alcoholic Beverages Companies.

In the absence of a long-term excise policy, companies cannot make long-term plans. They need clarity on the policy front over the next year or two at least in order to invest and execute in the state, Giri said.

'In recent times, we have seen frequent major changes in the excise policy, which have had an unsettling effect. Since Delhi's operating margins anyway are not great, companies with pan-India footprint have the option of prioritising other markets for supplies if faced with such an uncertain regulatory framework,' he added.

Giri said he expects a proper excise policy announcement by the government in the next fiscal. Delhi is far too important a market to be left to the twists and turns of an uncertain short-term excise regulation, he added.