Mumbai, June 11, 2025: In a significant move that will lead to a sharp rise in liquor prices across Maharashtra, the state cabinet on Tuesday approved a 50% increase in excise duty on Indian Made Foreign Liquor (IMFL), country liquor, and imported alcohol. The decision, the first such revision since 2011, is expected to boost the state’s annual excise revenue by approximately ₹14,000 crore while making alcohol significantly more expensive for consumers.
Key Changes in Maharashtra’s Liquor Tax Structure
The excise duty on IMFL has been raised from three times the manufacturing cost to 4.5 times, specifically targeting products with a production cost of ₹260 per bulk litre. Meanwhile, the duty on country liquor has increased from ₹180 to ₹205 per proof litre.
As a result, a 180 ml bottle of country liquor will now cost a minimum of ₹80, up from ₹60–70, while IMFL prices will jump to ₹205 from ₹115–130. Premium foreign liquor brands could see prices rise to ₹360, up from ₹210.
Introduction of Maharashtra Made Liquor (MML)
In an effort to expand revenue sources and support local manufacturers, the government has introduced a new category—Maharashtra Made Liquor (MML). This segment aims to bridge the pricing gap between country liquor and IMFL and will be made exclusively from grain-based alcohol.
Only liquor manufactured and registered within Maharashtra will qualify as MML, excluding national and foreign brands. The government estimates the current market size for this segment at 5–6 crore litres, with potential growth to 10–11 crore litres, generating an additional ₹3,000 crore in revenue.
Reviving Local Alcohol Manufacturers
Officials stated that the move will benefit local farmers by increasing demand for grain and revive inactive distilleries. Maharashtra has 70 licensed alcohol manufacturers, but 38 remain non-operational due to competition from established brands.
“MML is designed to revive these units and promote the local liquor industry,” said a senior excise department official.
Industry Experts Raise Concerns
However, industry leaders have criticized the steep tax hike, warning that it could encourage smuggling from neighboring states with lower taxes.
Pramod Krishna, former Director General of the Confederation of Indian Alcoholic Beverage Companies, said, “Maharashtra was already the most highly taxed state for liquor. This decision will worsen the situation and is disconnected from ground realities.”
Festive Season Licensing Relaxation
In a related move, the state has allowed FL-2 (liquor vending) and FL-3 (on-premise sale) license holders to operate on lease by paying an additional 15% and 10% of their annual fees, respectively.
Conclusion
The Maharashtra government’s decision to hike excise duty and introduce MML marks a major shift in the state’s liquor policy. While it aims to boost revenue and support local businesses, the immediate impact will be higher prices for consumers, potentially altering drinking habits and market dynamics.
