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“Drink makes a man forget himself. He ceases to be a man, becomes less than a beast for the time being. It never does the slightest good. I hope, therefore, that you will combat the curse with all your strength”, was how Mahatma Gandhi had cautioned the country way back in 1925. Some 35 years later, in 1960, Gandhiji’s birth state, Gujarat, prohibited alcohol. Following Gujarat’s example, Nagaland, Manipur, Bihar, and Lakshadweep too prohibited alcohol later.

After going dry, these states took a hit in their revenue collection but the move found admirers in many, especially women. However, some argue that liquor is still available in the black market in these states. Since it is being sold illegally, the prices are inflated and there are regular raids to control such illegal sale. The available legal liquors in India are Indian Made Foreign Liquor (IMFL), Imported Foreign Liquor (IFL), and Country Liquor. It is a difficult task to stop consumption of alcohol completely; India is probably not trying to do so either. The need of the hour is strict administrative and legal mechanisms to combat the hazards of alcohol. According to the Administrative Report 2016-17 published by the Excise Directorate, Government of West Bengal, “The policy of the state governments of India is not to encourage indiscriminate growth in consumption of intoxicants but to socially regulate it in a manner such that even with respect to the existing pattern of consumption, drinking is conducted in a safe manner. That is the persons who are in the habit of consuming intoxicants turn away from the consumption of illicitly distilled and or non-duty paid intoxicants to socially regulated consumption of intoxicants from legitimate sources which ensure safety against health hazards and lead to a consequential growth in revenue as well.”

Regulations of the Excise Directorate

The Excise Directorate operates the enforcement of regulations relating to the manufacture, production, import, export, transport, sale, purchase, possession or consumption of liquor and other intoxicants. The Excise Directorate works according to the following Acts and rules framed there under the Bengal Excise Act, (Bengal Act V of 1909), the Medicinal and Toilet Preparations (Excise Duties) Act (Central Act 60 of 1955) and the West Bengal Molasses Control Act, (West Bengal Act VI of 1973). According to the 1909 Act, “no person has the right to trade in any liquor or other intoxicants unless he is specifically granted a licence, permit or pass.” In order to start manufacturing units of foreign liquor in West Bengal, applications need to be made to the Excise Commissioner, West Bengal, along with non-refundable application fee of Rs. 50,000. This is also applicable to the other Indian states where the product is not banned. If the Excise Commissioner is satisfied with the financial capability and other documents, he can recommend the proposal to the state government to issue the Letter of Intent (LOI). After the issuance of the LOI by the state government, the Excise Commissioner asks the applicant to deposit Rs. 5,00,000 to the Collector of the excise department. On receipt of the application for licence, the Collector examines the suitability of the site, the building plan and other aspects including the clearance of the project regarding pollution. The applicant must submit the application within six months of the issuance of the LOI. Before the licence to run the manufactory is granted, the applicant must deposit a security of Rs. 50,000.

Licence of country spirit bottling plants

Before 2010, the pricing of distribution of country spirit was under the government regulator. The bottlers of country spirit were also given privileges to supply their distilled product in a particular area in West Bengal. Nevertheless, from December 2010, the country spirit section was put out of regulation to some extent. New country spirit rules were issued by the government. Government control over pricing of country spirit was also relaxed. With the initiation of this section, new players emerged in the market and the country liquor segment has witnessed a substantial growth.

Special section

The excise department manages the use of alcohol for industrial, medicinal and cosmetic purposes through the Special Section of the Excise Directorate which is headed by a Deputy Commissioner of Excise. The section is accountable for directive, control and implementation of Medicinal and Toilet Preparation Act, 1955 and the associated rules that were formulated in 1956. This section also administers ‘The Narcotics Drugs and Psychotropic Substances (NDPS) Act’, 1985 and the NDPS rules, 1985.

Preventive activity against illicit distillation of liquor

The central government, as well as the state governments are pro-active in curbing the sale of illicit liquor. In West Bengal, for the years 2016 and 2017, 61354 cases were lodged against illicit distillation of liquor. At that time, 17.759 lakh liters of illicitly distilled liquor was seized. Noteworthy seizure of fake liquor and over proof spirit has also been registered. Under the Narcotic Drug and Psychotropic Substances Act, 1985, around 20 cases were lodged by the Excise Department in the FY 2017-2018 in West Bengal.

Recovery of arrears of central excise duty

Upender Gupta, Commissioner (GST), on April 13, 2018, issued a circular related to the recovery of arrears of central excise duty, service tax and Central Value Added Tax (CENVAT) credit under the Central Excise Act, 1944 and Chapter V of the Finance Act, 1994. In case of any appeal or review relating to any claim for CENVAT credit under the existing law, any amount will become recoverable. CENVAT credit of Central Excise Duty availed was passed in terms of interim provisions as per section 140 of the CGST Act. If it is not recovered under the existing law, it can be recovered as tax arrears under section 79 of the Central GST Act. Apart from that, pending amounts can also be recovered under the CGST Act according to Section 142 (8) (A). Additionally, it can also be recovered as per Section 142(9) (a) of the CGST Act.

Black market of liquor

India’s liquor policy imposes huge restriction on the import of foreign liquor. It has led the country to a growing figure of illegal liquor businesses in India. For the state-wide ban on liquor sale in Gujarat, sales of spurious and cheap liquor have climbed followed by an increase in crimes in areas where the demand is high. The black market in liquor is so large that it creates great uncertainty for the economy. It is impossible to estimate the size of this market in the case of any state. The excise departments collect fines and penalties from the illegal trade liquor.

To decrease the number of accidents for over-consumption of liquor and illegal trading of the same in December 2016, Supreme Court banned liquor sale along all highways. Dr. Amitesh Mukhopadhyay, Professor of Sociology, Jadavpur University, told BE that “settlement of the bars and foreign liquor off shops owners with police is a relevant question of developing countries like in India. On the other hand, here the conception of the citizen is very limited in our country. VIPs and the common people are dealt differently everywhere including cases of punishment for any offence. Related to this, accidents on highways after over consumption of alcohol and the negligence of police have been a pertinent discourse for years and is increasing.”

On March 6, 2018, the Excise Directorate of West Bengal notified that only the highways passing through areas with population of less than 20,000 will be under ban realm. Most of the highway liquor shops and bars reopened after that. Dr. Mukhopadhyay also mentioned, “Maybe recently we have not noticed any of news of deaths due to the consumption of spurious liquor but it is evident that  the manufacture, delivery and consumption of the same is still continuing in the state. Consumption of liquor, cigarettes and illicit drug has become a social disease now. This is affecting our country socio-economically. We need to fight this hand in hand by consciousness and proper education.”

A report by the Gender Resource Centre, Department of Social Welfare, Government of Bihar informs that the rate of mental, physical, verbal, sexual and economical violence has decreased after prohibition of alcohol in the state. Though no one is claiming that illegal and spurious liquor is completely unavailable now, it is stated by a study of Asian Development Research Institute, Bihar that the domestic violence and other crimes is far lesser now.