Leh, Ladakh: The Lieutenant Governor of the Union Territory of Ladakh, Vinai Kumar Saxena, has approved a comprehensive new excise policy aimed at significantly curbing the rising dependency on narcotics and drugs within the region. The policy also seeks to provide residents and tourists with a wider selection of low-alcoholic content beverages, while optimizing excise revenue through a transparent and regulated framework.
Information was available with The Chenab Times that the new policy represents a substantial reform in Ladakh’s excise regime, introducing a liberalized, transparent, and technology-driven regulatory system designed to balance public convenience, promote tourism, enhance revenue, and ensure effective regulation of the liquor trade.
The development follows extensive consultations with various stakeholders, including civil society organizations, NGOs, religious bodies, public representatives, and government officials. A recurring concern voiced during these meetings was the escalating use of narcotic and psychotropic substances, partly attributed to the limited availability of traditional liquor, which reportedly pushed individuals towards illegal narcotics and smuggled or adulterated alcohol. Both the Ladakh Gompa Association and medical experts had advocated for an expanded range of alcoholic beverages at authorized outlets to combat drug abuse. In response, Lieutenant Governor Saxena had pledged to review the existing excise policy.
Consequently, a committee of officers was formed to draft the revised policy. This committee meticulously examined aspects related to public convenience, prevention of illicit liquor trade and its societal repercussions, augmentation of excise revenue, transparency in the allotment of liquor vends, streamlining of licensing procedures, digitalization of departmental processes, and the strengthening of enforcement mechanisms.
A pivotal feature of the new policy is the relaxation of the previously restrictive regime. This regime had led to limited brand and outlet availability, creating an ‘artificial scarcity’ that deterred tourists. Many visitors resorted to carrying liquor from outside Ladakh, resulting in revenue losses for the Union Territory. The new policy aims to rectify this by expanding lawful supply channels under strict regulatory oversight.
Key reforms enacted under the new policy include the permission for the sale of hard liquor, including Foreign Liquor and Indian Made Foreign Liquor (IMFL), through retail vends. Previously, only beer, wine, and Ready-to-Drink (RTD) beverages were permitted. Excise duty rates for liquor, beer, and wine have been rationalized. For the first time, retail liquor sales are permitted in guest houses and homestays upon payment of requisite license fees, a privilege previously exclusive to hotels. The policy also introduces the allowance of beer bars with micro-breweries in Ladakh.
To enhance accessibility and ensure regulated availability, 20 liquor vends will be established via e-auction, a significant increase from the two operational vends previously. Liquor will now be accessible in the newly formed districts of Nubra, Changthang, Sham, and Zanskar, extending availability beyond Leh city. Consumption of liquor is now permitted within hotel premises, including rooms, broadening the scope from the previous restriction to bars only.
The administrative burden for obtaining an excise license has been considerably reduced, with the required documentation cut from 16 to just 6: PAN, Aadhaar, incorporation certificate, premises blueprint, GST/FSSAI/Tourism Registration (whichever is available), and compliance with Rule 18 of the Excise Rules. The prior mandatory ‘Opinion’ from the District Administration for license grants, which often caused delays of several months, has been removed.
Furthermore, permission has been granted to serve liquor on special occasions at private venues and in banquet/party halls, subject to the payment of requisite fees, which was not allowed previously. Manufacturers are now permitted to engage in wholesale distribution of liquor, fostering the availability of quality brands and improving supply chains. A simplified duty structure with a single framework at wholesale and retail levels has been introduced, replacing the former multiple-duty system. A uniform excise duty of ₹500 per LPL has been prescribed for all IMFL brands to prevent revenue leakage and streamline administration.
To optimize excise revenue, the annual fee for a wholesale license has been increased from ₹3.5 lakh to ₹5 lakh. The base price for retail vends has also been revised, set at ₹60 lakh in Leh Municipal wards and ₹30 lakh in other areas. The profit margin for retailers has been reduced from 12% to 10%.
The revised policy mandates that manufacturers and importers affix security holograms approved by the Excise Department on liquor products to prevent evasion and enhance traceability. In consideration of environmental concerns, the sale of liquor in plastic bottles is prohibited, with sales restricted to approved glass bottles, PET bottles, and tin cans. The policy also stipulates that licensees must employ individuals above 21 years of age, thereby aiming to create employment opportunities.
Licensees must also ensure compliance with prescribed norms regarding a 100-meter distance from religious places, educational institutions, hospitals, and public parks, as per Government of India guidelines, before establishing retail vends.
The Chenab Times News Desk